FCA Seeks Industry Feedback on Proposed UK Crypto Regulations

TLDR

• The UK Financial Conduct Authority has entered the final stage of its crypto regulations consultation process.
• The FCA is seeking industry feedback on ten proposed rules that aim to align crypto with traditional finance standards.
• The proposals include new business conduct rules and restrictions on buying crypto with credit.
• The FCA has set a March 12 deadline for stakeholders to submit their feedback on the proposals.
• A new licensing regime for crypto service providers is expected to open for applications in September 2026.

The Financial Conduct Authority (FCA) has advanced to the final stage of consultations on a wide-ranging crypto regulations package. It seeks industry feedback on ten proposals designed to align digital asset activities with traditional financial standards, while improving transparency and operational clarity for firms working in the UK market.

FCA Seeks Feedback on 10 Crypto Regulations Before March Deadline

The FCA published its latest consultation paper, calling it the “final step” in its crypto regulations consultation process.

The regulator is asking for comments by March 12 on ten specific proposals covering market operations and consumer protection standards. These rules aim to ensure crypto firms meet similar expectations as conventional financial service providers.

The proposals include new business conduct standards and limits on using credit cards to purchase cryptocurrencies. The FCA also outlined enhanced reporting duties and rules for asset safeguarding and retail collateral in lending activities.

It said, “These proposals continue our progress towards an open, sustainable and competitive crypto market that people can trust.” The regulator emphasized that crypto investments will always carry risks, and rules won’t eliminate volatility in digital asset prices.

Instead, it aims to increase transparency and help consumers understand crypto products and services better. The package is part of the UK government’s broader crypto framework designed to bring the sector inside the regulatory perimeter.

Licensing Regime to Launch in September 2026

Alongside the consultation, the FCA released a timeline for a licensing regime for crypto asset service providers. According to the current plan, the application window for firms seeking authorization will open in September 2026.

This regime would require crypto businesses to secure FCA approval and comply with ongoing regulatory obligations. The FCA has not confirmed all details but said further updates will follow closer to the launch.

Once in place, the system is expected to apply tighter supervision over crypto-related operations in the country. It will introduce structured oversight over custody, trading, and service conduct in the digital asset space.

The FCA stated that it has made progress since December, refining the proposed framework after releasing initial plans. These measures are part of the UK’s ongoing effort to harmonize its crypto oversight with traditional financial systems.

Government Reviews Crypto Donations and DeFi Tax Rules

Separately, the UK government is reviewing whether to ban cryptocurrency donations to political parties. This follows Reform UK’s announcement that it would accept digital assets as political donations.

Sources familiar with discussions said the proposal is included in the upcoming Elections Bill, though not officially confirmed. Reform UK has positioned itself as the country’s most crypto-friendly party under Nigel Farage’s leadership.

In another move, the UK Treasury backed a change in how decentralized finance (DeFi) activity is taxed. Under the proposed framework, users would avoid triggering capital gains tax when depositing tokens into lending protocols.

This would remove tax burdens during non-disposal actions in DeFi platforms and pools. The government has not finalized the plan but is moving forward with industry consultations on technical details.

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