The UK's Financial Conduct Authority (FCA) has established a window for crypto companies to apply for authorization, running from September 30, 2026, to February 28, 2027. This was announced in a directive from the regulator.
The provision under the Financial Services and Markets Act introduces regulation of digital assets under the FCA's jurisdiction and requires separate authorization for organizations engaging with clients in the UK. The new regime will take effect on October 25, 2027.
“We have created a framework that does not force companies to choose between regulatory certainty and the ability to grow. This regime provides both in a stable and competitive jurisdiction,” said David Gill, FCA's Executive Director for Payments and Digital Finance.
Who Needs Authorization
Authorization will be required for companies that issue regulated stablecoins, hold customer cryptocurrencies, manage trading platforms, act as dealers or agents, facilitate transactions involving digital assets, and provide staking services.
Current registration will not replace the new authorization. Even companies already registered under AML regulations will need to obtain separate permission, the FCA clarified. Firms that apply during the designated period can continue operating until the regulator makes a decision, should the review process not be completed by the regime's launch.
A transitional period is also in place for those who do not receive authorization or fail to submit their applications on time. Such companies may fulfill existing contracts but cannot enter into new agreements with current or potential clients in the UK. The maximum period for exiting the market will be two years, as noted by the FCA.
Stablecoins and DeFi
The FCA has relaxed some requirements for stablecoin issuers following consultations with the industry. According to Reuters, the key capital requirement has been reduced from 2% to 1% of the total issued "stablecoins." Systemically important stablecoin issuers recognized by the UK Treasury will be subject to further consultation by the FCA and the Bank of England in 2026.
Separate recommendations regarding decentralized finance (DeFi) will also be put out for consultation. According to Matthew Long, Director of the Payments and Digital Assets Division, “true DeFi” without an identifiable person conducting activities will remain outside the regulatory perimeter.
Previously, the New York State Department of Financial Services and the European Banking Authority signed a memorandum of understanding for joint oversight of the stablecoin market. The agreement aims to strengthen cross-border cooperation under MiCA.