FCA launches final consultation on 10 crypto rule proposals as UK prepares licensing window

The Financial Conduct Authority (FCA) has published a final consultation package setting out ten regulatory proposals intended to bring crypto firms closer to the compliance standards applied in traditional finance. The measures cover firm conduct rules, rules for crypto purchases facilitated by credit, strengthened reporting and transparency obligations, custody and safeguarding standards, and the treatment of retail collateral in borrowing arrangements. Respondents must submit feedback by 12 March 2026, accelerating the timeline for affected firms to assess operational gaps and estimate compliance costs. The FCA also signalled that an application/registration window for firms seeking formal authorisation is expected to open in September 2026, making FCA authorisation a practical precondition for UK market access from late 2026. The consultation sits against a backdrop of international regulatory change: the EU’s MiCA framework is completing a staged rollout that defines explicit applicability dates and licensing paths for crypto‑asset service providers, creating cross‑border predictability that many firms find commercially attractive. That EU clarity — combined with the FCA’s proposals — will push firms to reconcile UK‑specific obligations with MiCA requirements, complicating product design and onboarding for businesses operating across jurisdictions. At the same time, industry reporting shows rising operational frictions in the UK payments and banking gateway for crypto firms, including increased rejections or limits on fiat transfers that in some cases have routed business overseas or constrained growth. The combination of tougher authorisation tests and unreliable banking access risks amplifying the compliance burden for smaller operators and may incentivise domicile or routing decisions that favour jurisdictions with clearer, end‑to‑end market plumbing. For consumers and institutional counterparties, mandatory authorisation and higher reporting and custody standards should improve protections and reduce information asymmetries, but could also raise barriers to entry and concentrate activity in larger, better capitalised firms. The FCA’s package therefore tightens the regulatory architecture while exposing frictions in the surrounding ecosystem — notably bank‑level controls and payment flows — that policy makers will need to address to realise the UK’s ambition as a competitive crypto market. Stakeholders are encouraged to use the consultation window to give targeted, evidence‑based feedback on proportionality, operational feasibility, and interactions with cross‑border frameworks such as MiCA. Overall, the consultation reduces long‑run uncertainty but creates an immediate operational priority for firms that must align systems, custodial arrangements and bank relationships ahead of the expected licensing window.