The UK's Financial Conduct Authority (FCA) has softened its approach to regulating cryptocurrencies, introducing more flexibility for operators in the market. The FCA has modified several of its originally proposed rules, allowing matched principal trading and affiliate trading on Cryptoasset Trading Platforms (CATPs). This change is significant as it will improve liquidity on UK-based exchanges.
The regulator had initially sought to restrict these activities, but has now decided to require specific disclosure and consent guidelines for retail access to cryptoasset lending and borrowing. This marks a shift from the FCA's earlier stance, which was more restrictive. The decision not to impose blanket restrictions on retail access is notable, given the history of crypto lending platforms collapsing in 2022.
The revised approach falls under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, passed in February 2026. The full regime won't take effect until October 25, 2027, but the FCA is opening its application gateway for firms to seek authorization starting September 30, 2026.