FCA Sets Deadline for Crypto Company Authorization

The UK's Financial Conduct Authority (FCA) has announced a new application period for crypto companies seeking authorization, set to run from September 30, 2026, to February 28, 2027. This initiative is part of the broader regulatory framework established under the Financial Services and Markets Act, which aims to formalize the oversight of digital assets within the FCA’s jurisdiction.

Beginning on October 25, 2027, firms engaging with clients in the UK will require separate authorization, even if they are currently registered under anti-money laundering (AML) regulations. David Gill, FCA's Executive Director for Payments and Digital Finance, emphasized that the new framework aims to provide both regulatory clarity and opportunities for growth: “We have created a framework that does not force companies to choose between regulatory certainty and the ability to grow.”

Eligibility for Authorization

Companies will need authorization if they are involved in issuing regulated stablecoins, managing customer cryptocurrencies, operating trading platforms, acting as agents, or providing staking services. Those applying within the specified timeframe can maintain their operations until the FCA completes its review.

For firms that do not secure authorization or fail to apply in time, a transitional phase allows them to fulfill existing contracts but prevents new agreements with UK clients. The maximum time allowed for companies to exit the market will be two years.

Stablecoin and DeFi Regulations

In response to industry feedback, the FCA has reduced the capital requirement for stablecoin issuers from 2% to 1% of total issued stablecoins. Additionally, firms identified as systemically important will undergo further consultations by the FCA and the Bank of England in 2026. The FCA is also planning to consult on regulations pertaining to decentralized finance (DeFi), with Matthew Long stating that "true DeFi" operations without a designated individual will not fall under regulatory oversight.