On 26 November 2024, the United Kingdom Financial Conduct Authority (UK FCA) published the regulatory roadmap for the regulation of cryptoassets for a secure and innovative digital asset market. UK FCA’s latest consumer research revealed that 12% of UK adults now own cryptoassets, an increase from 10% in previous years. Public awareness has also risen to 93%, reflecting growing familiarity with digital currencies. However, the research also revealed misconceptions, as approximately a third of respondents believed they could raise a complaint with the UK FCA for financial protection if issues arise. The UK FCA emphasised that cryptoassets remain high-risk and largely unregulated, cautioning consumers to prepare for the possibility of losing their entire investment.
The UK FCA’s regulatory roadmap sets out a structured and phased approach. The plan builds on earlier achievements, including the introduction of anti-money laundering regulations for crypto-related businesses in early 2020. These measures were followed in late 2023 by financial promotions rules, which enforced stricter advertising standards to protect consumers from misleading or high-risk promotional content.
UK FCA aims to prioritise stablecoin regulation in the first half of 2025. This will involve implementing requirements for backing assets, redemption processes, custody, and record-keeping to ensure stablecoins are secure and transparent. Further measures will include asset segregation, reconciliation practices, and oversight of third-party service providers. The second half of 2025 will see a focus on market conduct and governance. This will include the introduction of rules to govern market abuse, disclosures, and admissions processes, ensuring transparency and accountability across the sector. A prudential sourcebook will be developed to outline capital and liquidity requirements, alongside risk management standards for crypto firms. Governance reforms will also be introduced, bringing crypto firms under the Senior Managers and Certification Regime.
By late 2025 and early 2026, the UK FCA will shift its attention to trading platforms and intermediation activities. New rules will address trading platform requirements for location, access, matching, and transparency, aligning with global best practices. Intermediaries will need to comply with order handling and execution requirements. Lending and staking activities will also come under regulation, ensuring clear ownership rights and enhanced disclosure obligations. By 2026, the UK FCA plans to finalise all rules and publish the accompanying policy statements. This will mark the opening of the regulatory gateway and the full implementation of the UK’s comprehensive crypto regime.
The UK FCA’s roadmap aims to engage with government, industry stakeholders, and international partners to develop a balanced regulatory framework, by focusing on phased consultations and transparent policymaking, the UK FCA aims to create a flexible system that accommodates market evolution while ensuring robust safeguards. Matthew Long, Director of Payments and Digital Assets at the UK FCA, underscored the importance of collaboration, stating, “We are committed to building a safe, competitive, and sustainable crypto sector. This roadmap outlines how we intend to work closely with stakeholders to achieve these goals while supporting innovation.”
The UK FCA’s regulatory initiatives will bring changes to the UK crypto landscape. Industry participants will need to prepare for enhanced compliance requirements, particularly regarding operational resilience, financial crime prevention, and consumer duty. Firms that adapt early to these regulatory changes may gain a competitive advantage in a more structured marketplace. For consumers, the roadmap promises greater clarity and protection, reducing risks associated with fraud and mismanagement. However, the UK FCA continues to caution against the high-risk nature of crypto investments, urging individuals to exercise due diligence and informed decision-making.
(Source: https://www.fca.org.uk/publication/documents/crypto-roadmap.pdf)
