UK Imposes Sweeping Crypto Rules Amid Market Volatility Concerns

The UK's Financial Conduct Authority (FCA) has unveiled sweeping new rules for crypto firms operating in the country. The regulations, set to take effect in October 2026, will require companies to prove they can weather market shocks and hold capital against risky assets.

According to David Geale, the FCA's executive director for payments and digital finance, this marks the first comprehensive regulatory framework for crypto in the UK. The rules apply the same core principles used across financial services, including meeting capital requirements and conducting annual stress tests.

Firms will have to build up a financial cushion to absorb losses from risky assets on their balance sheets and demonstrate they could withstand major market shocks and economic strain. However, unlike major UK banks, which receive specific scenarios from the Bank of England, crypto companies will run their own tests based on internal risk assessments.

Industry pushback led the FCA to cut the capital required for some assets, such as stablecoins pegged to fiat currency. Despite this, Dan Coatsworth, head of markets at AJ Bell, urged caution, saying regulation can reduce but not remove consumer risk entirely.