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Clifford Chance
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UK cryptoasset regulation – where are we now?

Crypto 30 June 2026

The UK's comprehensive new cryptoasset regime comes into force on 25 October 2027, with applications for authorisation opening in September 2026. Recent weeks have seen a flurry of activity with the Financial Conduct Authority (FCA) and Bank of England publishing final policy statements and guidance which represents a major step towards implementation of the new framework. We take a look at the latest developments and share what comes next.

UK STATUTORY FRAMEWORK FOR CRYPTOASSET REGULATION

The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (Cryptoasset Regulations) were made in February 2026 and broadly come into force on 27 October 2027. They:

  • define the principal categories of cryptoassets that will be part of regulation as 'qualifying cryptoassets', 'qualifying stablecoins' and 'relevant specified investment cryptoassets' – (a cryptoasset that is a specified investment under the Financial Services and Markets Act 2000
    (FSMA) that is a security or contractually based investment);
  • expand the regulated activities perimeter under FSMA by amending the Regulated Activities Order (RAO) to introduce specific new cryptoasset activities of issuing a qualifying stablecoin, operating a qualifying cryptoasset trading platform, safeguarding of qualifying cryptoassets and relevant specified investment cryptoassets, arranging deals in or dealing in qualifying cryptoassets as principal and agent and qualifying cryptoasset staking;
  • specify cryptoasset public offers and admissions to trading as designated activities under FSMA’s Designated Activities Regime (DAR), with statutory prohibition of public offers of qualifying cryptoassets in the UK; and
  • specify use/disclosure of inside information and market manipulation as designated activities under the DAR, alongside creating a wider market abuse framework for cryptoassets.

The Cryptoasset Regulations also make certain consequential amendments to existing UK regulatory regimes, including the financial promotions regime and the anti-money laundering framework.

In April 2026, Treasury published a statutory instrument to amend the Cryptoasset Regulations  (Amendment SI) primarily to provide greater clarity around payment services for UK qualifying stablecoins ahead of broader payment services reforms.

What's next?

  • Written comments were requested on the Amendment SI by 22 May 2026, which will now be under review. The final statutory instrument will then need to be laid to take effect, which is likely to happen in the coming months ahead of the framework coming into force in October 2027.
  • A consultation on proposed reforms to rationalise the dealing and payments regulatory perimeters for qualifying stablecoins is expected as part of wider payment services reforms.

FCA RULES AND GUIDANCE

Firms wishing to carry out one of the new regulated activities will require authorisation from the Financial Conduct Authority (FCA). In June 2026, the FCA published final policy statements and guidance that cryptoasset firms will need to comply with, building on their previous consultations and marking the completion of the FCA’s crypto roadmap. These are summarised below. While some amendments have been made, including simpler capital requirements for stablecoin firms and confirming that relevant specified investment cryptoassets will not be subject to the new CASS 17 rules for safeguarding qualifying cryptoassets, the FCA has broadly maintained the policy approach it consulted on. 

Alongside these publications, the FCA has published an aggregate Cost Benefit Analysis which looks at the impact of the new cryptoasset regulatory regime, including setting out the expected transition and ongoing costs for firms' compliance with the new regime. 

The FCA has also published new consultations on non-handbook guidance to help firms complete the overall risk assessment under the new prudential sourcebooks COREPRU: GC26/4: COREPRU Guidance Consultation and CRYPTOPRU: GC26/5: CRYPTOPRU Guidance Consultation.

Firms are understandably interested in the process for application for authorisation and variation of permission. We anticipate they will based on existing equivalent forms, however, application/variation of permission forms have not yet been made available for review/consultation or via the FCA's Connect site. 

What's next?

  • The application window for FCA authorisations will run from 30 September 2026 to 28 February 2027. Firms can already apply for pre-application meetings to discuss their application with the FCA using its PASS service.
  • The FCA is due to publish perimeter guidance for cryptoassets in September 2026, following its consultation in CP26/13.
  • The FCA has confirmed that it will consult on decentralised finance (DeFi) guidance, operational resilience guidance for firms using distributed ledger technology (DLT) and updates to the Financial Crime Guide relevant to cryptoasset firms later this year. 
  • Reponses to the consultations on non-handbook guidance to help firms complete the overall risk assessment under COREPRU and CRYPTOPRU are due by 30 July 2026.

REGIME FOR SYSTEMIC STERLING STABLECOINS

On 22 June 2026, the Bank of England published its policy statement on the regulation of sterling‑denominated systemic stablecoins, following the Bank of England’s 2025 consultation. The publication includes a draft Code of Practice for issuers of systemic sterling stablecoins. Systemic stablecoins will be joint regulated by the Bank of England and FCA. On 30 June 2026, they published their joint approach to the regulation of systemic stablecoin issuers, clarifying how the dual‑regulator model will operate and how FCA rules will apply when a stablecoin issuer is recognised as systemic by HM Treasury.

Systemic sterling-denominated stablecoins will require 1:1 backing, with a reduced requirement for 30% to be unremunerated central bank deposits (with the remaining balance in short‑term UK government securities). Backing assets will be protected by statutory trust with a requirement for redemption within 24 hours, with no suspension of redemptions permitted. No interest payments to coinholders are permitted. The Bank is no longer planning any retail/institutional holding limits, instead introducing a £40 billion issuance limit per systemic stablecoin, designed to be reviewed regularly and adjusted/removed once risks to credit provision are addressed. The Bank has confirmed it intends to introduce a Central Bank Liquidity Facility to provide liquidity to issuers to support the processing of redemptions by coinholders. 

What's next?

  • Comments on the draft Code of Practice for issuers of systemic sterling stablecoins are due by 22 September 2026.
  • Comments on the FCA and the Bank of England's joint approach to the regulation of systemic stablecoin issuers consultation are due by 30 September 2026.  

PRA REGULATED FIRMS

Some firms that wish to carry out cryptoasset activities such as large banks, insurers and investment firms may be joint regulated by the Prudential Regulation Authority (PRA). In May 2026, the Prudential Regulation Authority (PRA) published two “Dear CEO” letters with important guidance for firms operating in this space.

  • Innovations in the use of deposits, e-money and stablecoins The PRA reaffirmed its expectations on banks’ use of deposits, e‑money and stablecoins, supporting innovation (e.g. tokenised deposits) but stressing that stablecoins and e‑money must be issued from separate, insolvency‑remote entities with clear branding to avoid customer confusion and contagion risk. It adds further guidance on risk management, disclosure, and prudential safeguards to ensure financial stability as digital money use evolves.

  • The prudential treatment of tokenised assets, stablecoins and other cryptoasset exposures The PRA has updated its expectations on banks’ cryptoasset exposures, taking an interim approach pending a fuller prudential regime to be aligned with the Basel Committee on Banking Supervision (BCBS) standards which are undergoing a targeted review. It reaffirmed a cautious, risk‑based approach under the existing prudential framework (including a 100% capital requirement for unbacked cryptoassets), while allowing more risk‑sensitive treatment where justified by asset characteristics. It also confirmed that tokenised traditional assets should generally be treated like their non‑tokenised equivalents (“same risk, same regulatory outcome”).

What's next?

  • The PRA has indicated it will continue to monitor market developments and work with other UK authorities as the regulatory framework evolves. It requests that firms keep supervisors informed of "any material developments in their plans for innovations in the use of digital money or money-like instruments" and how those plans meet the expectations set out in these letters and in the 2023 Dear CEO letter.
  • In due course and following the completion of BCBS's targeted review, the PRA will publish a proposed future prudential framework. 

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