More milestones on the UK's crypto roadmap

Quick read

In an end-of-year bonanza of regulatory announcements, more details of the framework for UK crypto regulation have emerged.

UK government reiterates its commitment to crypto

On 15 December 2025, alongside the publication of the final secondary legislation expanding the UK's regulatory perimeter to capture crypto, the government confirmed its intention for the UK to become "a global destination for digital assets and attract more investment". Under the new regime due to come into force in 2027, crypto firms will be regulated by the Financial Conduct Authority (FCA) like other financial services providers in line with the 'same risk, same regulatory outcome' principle.

Final legislation

The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025 (Regulations), which were accompanied by an explanatory memorandum, contain a number of changes to the draft legislation published in April of this year, which we reviewed in our article here. The Regulations must now be approved by both Houses of Parliament (expected in 2026).

Key points to note

The Regulations confirm the new categories of specified investments (qualifying cryptoasset, qualifying stablecoin, and specified investment cryptoasset) and specified activities for cryptoassets (stablecoin issuance, safeguarding, operating a qualifying cryptoasset trading platform, dealing in qualifying cryptoassets as principal and agent, arranging deals in qualifying cryptoassets, and qualifying cryptoasset staking). Firms within scope will need to become authorised by the FCA.
Market abuse and admissions and disclosures provisions were not addressed in the draft legislation. The final Regulations create a comprehensive designated activities regime for public offers, admissions to trading, and market abuse and give the FCA rulemaking powers for the new designated activities.
Overseas firms that provide services to UK retail clients will need to be authorised in the UK. However, overseas firms that serve only UK institutional customers will not be required to be authorised, assuming those institutional customers are not acting as an intermediary to a UK consumer.
An overseas stablecoin issuer is outside of the scope of the activity of stablecoin issuance assuming it is not arranging for any of the component parts of the activity (offering, redemption, and maintaining the value of a qualifying stablecoin) to be carried out in the UK on its behalf. The stablecoins will remain subject to the designated activities regime.
The definition of a qualifying cryptoasset has been clarified to exclude mere records of value or contractual rights (such as a cryptographically secured/encrypted spreadsheet).
The exclusions in the final Regulations are broader than in the draft legislation. In particular, there is now an exclusion for activities carried on for the sale of goods or the supply of services to customers and an exclusion for activities that are "incidental" to the carrying of a profession or business.
The Regulations make consequential amendments to other legislation including the Financial Promotion Order, the Money Laundering Regulations, the Electronic Money Regulations, which have been amended to clarify the distinction between e-money and stablecoins, and the Payment Services Regulations, which have been changed to confirm that issuing a qualifying stablecoin does not amount to a payment service.
The new regime will go live in October 2027. The Regulations enable the FCA to set out a transitional regime for businesses to submit applications to the FCA ahead of this date.
HMT will review the regime at least every five years.

Further FCA consultations

On 16 December 2025, the FCA published three consultation papers (CPs) on core elements of its regulatory regime for cryptoassets:

CP25/40 covers proposed rules and guidance for firms conducting regulated cryptoasset activities such as trading platforms, intermediaries (including cryptoasset lending and borrowing), staking, and decentralised finance.
CP25/41 covers proposed rules and guidance based on the designated activities regime (see above) for the offering to the public of qualifying cryptoassets that are or will be admitted to trading on a UK qualifying cryptoasset trading platform (CATP), the admission of qualifying cryptoassets to trading on CATPs, disclosure obligations relating to admissions to trading and the issuance of UK-issued qualifying stablecoins, and requirements to prevent, detect and disrupt market abuse in cryptoasset markets.
CP25/42 sets out the proposed prudential rules and guidance for in-scope cryptoasset firms. It builds on CP25/15, which we discussed in an earlier update.

Comments on each CP must be submitted by 12 February 2026.