Crypto firms operating in the UK will be required to meet tougher standards under a new regulatory framework announced by the Financial Conduct Authority.
The rules will apply to businesses that help consumers buy, trade and hold cryptoassets, bringing them closer to the regulatory expectations already placed on traditional financial services providers.
All firms covered by the framework will need to demonstrate sufficient financial resilience. This will include meeting capital requirements and carrying out stress testing to show they can withstand periods of financial difficulty or market disruption.
The FCA is also introducing new market integrity rules designed to address misconduct such as insider trading and market manipulation. These measures are intended to improve confidence in crypto markets and provide greater protection for consumers and investors.
Specific requirements will apply to stablecoins, which are cryptoassets designed to maintain a relatively stable value, often by being linked to a currency such as sterling.
The regulator said stablecoins will be subject to clear, robust and transparent standards, helping users better understand how they operate and the safeguards in place.
In developing the framework, the FCA drew on international best practice and applied existing financial services standards where the risks are considered comparable. This includes the Consumer Duty, which requires regulated firms to act to deliver good outcomes for retail customers.
David Geale, Executive Director of Payments and Digital Finance at the FCA, described the announcement as a significant moment for crypto regulation in the UK.
He said the framework aims to give firms greater regulatory certainty while preserving space for innovation, helping the UK remain a competitive location for crypto businesses to develop and grow.
For consumers, the changes mean crypto firms will be held to standards that are more closely aligned with those applying elsewhere in financial services. However, the FCA has stressed that regulation cannot remove every risk associated with cryptoassets.
The new framework marks an important step in bringing the crypto sector within a more established regulatory structure. Firms operating in the market will need to prepare for increased oversight, while consumers should benefit from clearer standards and stronger protections.
