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UK FCA Outlines Regulatory Framework for Crypto Ahead of 2027

The UK's Financial Conduct Authority (FCA) is embarking on a comprehensive path to regulate cryptocurrencies effectively.

A recent consultation outlines activities that will fall under the FCA's forthcoming regime, with implementation set for October 2027.

Firms can begin applying for regulatory authorization from September 2026, marking a significant shift in the UK's approach to crypto.

This new framework will encompass services such as trading, custody, stablecoin issuance, and staking, aiming to create a more trustworthy market.

Yuriy Brisov from Digital & Analogue Partners noted the FCA's focus on an "activity-based perimeter," which provides flexibility in regulation.

The approach prioritizes intermediated models rather than comprehensive licensing of entire firms.

As the conversation around decentralized finance (DeFi) continues, the FCA plans to consult on DeFi guidance later this year.

The consultation closes on June 3, and final regulations are anticipated this summer, alongside further guidance in the autumn.

Significant legislative changes have already placed crypto activities within the regulatory scope, prompting firms to reassess their compliance strategies.

This regulatory framework aims to cultivate an "open, sustainable, and competitive" crypto market in the UK while addressing key areas like financial crime and market abuse.