UK FCA Publishes Final Crypto Regulatory Framework with Mandatory Licensing

The UK Financial Conduct Authority (FCA) has finalized its comprehensive crypto regulatory framework, which will take effect on October 25, 2027. The new rules apply to various crypto service providers, including exchanges, custodians, stablecoin issuers, staking providers, and certain DeFi entities where a controlling party is identifiable.

The FCA has removed an exception that allowed fungible cryptoassets to be listed without a disclosure document, and replaced a two-tier classification with a single 40% net risk position requirement and a 40% counterparty default volatility adjustment.

Stablecoin issuers will need to meet strict reserve backing, safeguarding, redemptions, and customer disclosures requirements. The K-SII capital coefficient has been reduced from 2% to 1% to lower compliance costs for companies.