UK Crypto Firms Must Obtain Authorization Under Final Regulatory Framework

The UK's Financial Conduct Authority (FCA) has introduced its final regulatory framework for cryptocurrencies, bringing clarity to the industry ahead of its deadline. The new rules, set to go live on October 25, 2027, require all crypto firms operating in the country to obtain FCA authorization.

Key features of the framework include mandatory licensing for crypto firms, capital stress-testing requirements, and strengthened rules against market manipulation and insider dealing. Stablecoin issuers will also be subject to new reserve composition rules and user withdrawal rights.

The FCA emphasized that the framework is designed to provide 'regulatory certainty' without stifling innovation in the industry. David Geale, executive director of payments and digital finance at the FCA, stated that the regulator has built a system intended to provide 'regulatory certainty' without forcing firms to choose between compliance and innovation.

The licensing process is set to begin on September 1, with a window for companies to apply for authorization until February 28, 2027. The FCA will also host a webinar on July 17 to publish key policy statements and explain how the regulatory perimeter applies to cryptoasset activities.