Fireside Chat with Val Smith, UK Financial Conduct Authority

Navigating the Future Digital Finance Landscape 2026

We were delighted that Val Smith, Head of Authorisations, Payments and Digital Assets at the UK's Financial Conduct Authority (FCA) was able to join our recent Navigating the Future Digital Finance Landscape event jointly hosted with GBBC and share some highlights of the UK's new cryptoasset regulatory framework.

The UK's comprehensive new cryptoasset regulatory framework will broadly take effect from 25 October 2027. It will shift regulation from a narrow, financial‑crime‑focused registration regime to a full authorisation regime under the Financial Services and Markets Act (FSMA) framework, bringing a new set of cryptoasset activities into the regulatory perimeter.

The FCA has recently confirmed that the application period for authorisations under the new framework will run from 30 September 2026 to 28 February 2027.

Our key takeaways

2027 is closer than it seems: Firms wishing to operate under the new regime from October 2027 should be planning authorisation strategies now, not waiting for final rules.
Authorised elsewhere? Still plan early. Firms licensed in the EU under MiCA (the Markets in Crypto-assets Regulation) or elsewhere will have a great starting point, but the FCA expects them to map gaps, explain UK‑specific adjustments, and avoid simply importing group‑level documents.
Crypto stigma is fading: Application success rates for the existing AML cryptoasset registration regime under the MLRs have risen significantly - from under 15% to over 50% - as both firms and the FCA have matured in understanding expectations. Firms must demonstrate strong governance, competent management and solid controls whether they are a crypto firm or a traditional financial institution.
Sandboxes and support are expanding: Support on offer includes Innovation Pathways, the regulatory sandbox, the Digital Securities Sandbox and dedicated AI and stablecoin sandboxes, offering firms structured testing environments. The FCA will also offer free, pre‑application meetings from July for firms preparing for authorisation, aimed at reducing errors and mismatched expectations later in the process.
DAOs aren’t off the table: While truly decentralised structures remain outside the scope of regulation, the FCA is open to discussion where a DAO has a hybrid structure with clear accountability and can meet UK regulatory requirements. Firms should raise this early, taking advantage of free pre‑application meetings.

WATCH RECORDING NOW

Val Smith, Head of Authorisations, Payments and Digital Assets at the UK Financial Conduct Authority in conversation with Diego Balloon Ossio

Val Smith, Head of Authorisations, Payments and Digital Assets at the UK Financial Conduct Authority in conversation with Diego Ballon Ossio, Partner, Clifford Chance.