UK Financial Regulator Moves to Final Stage of Crypto Regulation Consultation

The Financial Conduct Authority (FCA) of the UK has progressed to the concluding phase of consultations regarding a comprehensive array of proposed cryptocurrency regulations, furthering the government’s extensive initiative to firmly integrate digital assets within the nation’s regulatory framework.

Key Takeaways:

• The FCA has commenced the final consultation stage on 10 proposed regulations aimed at overseeing the UK cryptocurrency market.
• The regulatory body seeks to enhance trust and transparency while recognizing that the risks associated with cryptocurrency investments will persist.
• A new licensing framework for cryptocurrency companies is anticipated, with application processes expected to commence in September 2026.

In a recent announcement, the FCA expressed its desire for feedback on 10 proposed regulations, characterizing this move as the “final step” in its consultation efforts.

The proposals are intended to influence the operational practices of cryptocurrency firms in the UK, aligning the sector more closely with the standards applicable to traditional financial markets.

FCA States New Crypto Regulations Aim to Foster Trust While Acknowledging Risks

“These proposals mark our ongoing journey towards establishing an open, sustainable, and competitive cryptocurrency market that the public can rely on,” the regulator stated.

Simultaneously, the FCA emphasized that investing in cryptocurrencies will always involve risk, and the purpose of regulation is to enhance transparency and consumer comprehension rather than completely eradicate volatility.

The consultation package encompasses a broad spectrum of market activities.

This includes proposed regulations regarding business conduct standards, limitations on using credit for cryptocurrency purchases, requirements for regulatory reporting, asset safeguarding, and the treatment of retail collateral when borrowing digital assets.

Stakeholders have until March 12 to provide their feedback.

BREAKING: The UK Just Moved to Fully Integrate Crypto Firms Into the FCA Rulebook pic.twitter.com/mGBJ61hLLB

— Ryan (King) Solomon (@IOV_OWL) January 23, 2026

The proposals were initially presented in December when the FCA indicated its plan to regulate cryptocurrency in a manner broadly aligned with traditional financial services.

Since then, the regulator claims to have made “substantial progress” in refining the framework as part of the government’s cryptocurrency roadmap.

Earlier this month, the FCA also released a preliminary timeline for a new licensing regime applicable to cryptocurrency asset service providers.

According to the current plan, the authorization application period for firms is expected to open in September 2026, though the regulator has noted that further details will be confirmed at a later time.

Once implemented, the licensing regime would enforce stricter oversight on cryptocurrency enterprises operating within the UK, necessitating FCA approval and continuous compliance with regulatory standards.

UK Considers Ban on Cryptocurrency Donations

As reported, the UK government is contemplating a prohibition on cryptocurrency donations to political parties, a decision that could have a direct impact on Reform UK, which has recently become the first political party in the nation to accept digital assets.

This proposal is under consideration as part of the forthcoming Elections Bill, according to sources familiar with the internal discussions, although officials have yet to formally announce the plan.

The discussion follows Reform UK’s efforts to position itself as the most cryptocurrency-friendly party in Britain under the leadership of Nigel Farage.

Additionally, the UK government has taken a step closer to revamping the taxation of decentralized finance activities, supporting a new framework that would prevent users from incurring capital gains tax each time they deposit tokens into lending protocols or liquidity pools.

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