【UK FCA Releases Final Crypto Regulation Framework, Mandatory Licensing Regime to Take Effect in October 2027】

The UK Financial Conduct Authority (FCA) finalized a comprehensive crypto regulation framework on Tuesday, with a mandatory licensing regime coming into effect on October 25, 2027. The framework covers prudential requirements, market abuse regulation, and stablecoin standards, applying to crypto trading platforms, custodians, stablecoin issuers, lending and staking service providers, as well as some DeFi companies with identifiable controlling entities. Firms can apply for authorization from September 30, 2026, to February 28, 2027, and existing anti-money laundering registrations will not automatically convert. Regarding trading platform rules, the FCA requires UK-eligible crypto asset trading platforms to conduct due diligence, meet admission criteria, and publish disclosure documents, while removing the previous exemption that allowed fungible crypto assets to be listed without disclosure documents. Market abuse rules cover insider trading and market manipulation. On stablecoins, the FCA canceled the redemption forecast obligation for reserve assets, allowed limited intra-group custody arrangements, and reduced the K-SII capital coefficient for stablecoin issuance from 2% to 1%. A uniform 40% net exposure requirement and a 40% counterparty default volatility adjustment will apply to crypto assets on eligible platforms. David Geale, Executive Director of Payments and Digital Finance at the FCA, called the framework a significant milestone for UK crypto regulation, providing regulatory certainty for businesses while maintaining room for innovation.