Recent regulatory actions suggest the UK is making serious progress in the crypto space, according to Wirex CEO Chet Shah.
By Chet Shah|Edited by Cheyenne Ligon Jul 11, 2026, 3:00 p.m. 4 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred onIn a short span of time, the Financial Conduct Authority (FCA) and the Bank of England have made significant regulatory strides that signal the UK’s commitment to this vision, proposing rules that aim to foster a conducive environment for both retail and institutional adoption of cryptocurrencies.
The FCA recently finalized its regulations for the crypto sector, which include guidelines on capital requirements, admissions, disclosures, and an overarching conduct framework for crypto companies. Concurrently, the Bank of England has removed previous restrictions on the holdings of fiat-pegged stablecoins and reduced the reserve ratio from 40% to 30% for issuers at the central bank.
These moves are the strongest indication yet that the UK is serious about establishing a leading regulatory framework for cryptocurrencies.
Chet Shah is the CEO of Wirex Limited, a FCA-regulated fintech firm based in London.
Challenges and Perceptions
It is widely acknowledged that the UK's crypto sector has been trailing behind its global counterparts in recent years. Earlier proposals from the Bank of England regarding stablecoins, introduced in November 2025, were met with significant pushback from the industry due to their perceived restrictiveness, which many argued would hinder growth. Those proposals included limits on individual holdings of systemic sterling stablecoins to £20,000 and business holdings to £10 million, which critics claimed were overly conservative and detrimental to the UK's competitive edge.
Additionally, the FCA's previous approach to crypto regulation was often viewed as excessively cautious, characterized by ambiguous operational guidelines, slow processing times for authorizations, and impractical FinProm rules that govern how financial products can be marketed to UK consumers.
Moreover, the UK crypto industry faced obstacles when several major financial institutions restricted or prohibited customer transactions with crypto exchanges, citing fraud and money laundering concerns, despite many of these exchanges being FCA-regulated. Critics argue this has added unnecessary barriers to the UK's competitive landscape.
Learning from Global Trends
While the UK has been slow to act, global adoption of stablecoins has surged, with the number of unique holders of non-dollar stablecoins increasing thirtyfold from January 2023 to February 2026, as reported by Visa and Dune’s Beyond Dollarization report. This growth is largely driven by real-world transactions, settlements, and payroll, rather than mere speculation.
Other regions recognized the potential of stablecoins earlier and are advancing toward regulatory frameworks that support growth. The EU's MiCA framework initiated with specific rules for stablecoins, resulting in a rise in Euro stablecoin transfer volume from $270 million to $8 billion monthly. The US has followed suit with the GENIUS Act, which replaced a fragmented regulatory landscape with enforceable standards for reserve assets, redemption rights, disclosures, and custody.
Ultimately, the jurisdictions that will thrive as global crypto hubs are those that provide regulatory certainty while genuinely incorporating industry feedback into their evolving rules.
Adapting to Industry Needs
One of the most encouraging aspects of the UK's recent announcements is the regulators' willingness to refine their proposals based on industry input.
What were once viewed as excessive reserve requirements for stablecoins have been revised by the Bank of England in response to industry concerns, making them more commercially viable. Additionally, the FCA has committed to collaborating with the Bank of England on the stablecoin framework and plans to consult later this year on how FCA regulations will apply once a stablecoin issuer is classified as systemic, meaning it is considered significant to the broader financial system. This marks a significant step forward in cross-departmental cooperation, which has previously been a challenge for firms navigating the regulatory landscape split between the FCA and the Bank of England.
However, many stakeholders hope that this is not the final version of the regulations. The £40 billion cap on any single systemic sterling stablecoin is relatively low compared to the market capitalization of leading stablecoins like USDC and USDT. While this cap is a reasonable interim measure, the Bank has expressed intentions to revise or eliminate it as stablecoins become further integrated into the financial ecosystem. Continuous review based on evidence and ongoing industry dialogue will be essential for the UK to maintain its competitive edge.
Future Developments
The UK crypto sector is preparing for October 2027, when it will be mandatory for any firm operating in the UK to be authorized under the new crypto regime, with upcoming industry consultations for feedback. If the Bank and FCA continue to embrace industry feedback as they have recently, UK regulation could effectively balance consumer protection, talent attraction, and innovation encouragement. This is a long-awaited development that could establish the UK as a credible global leader in the crypto space.
Significant portions of the UK's digital asset framework still need to be finalized, including guidelines for DeFi, operational resilience standards for companies utilizing distributed ledger technology, and the tax treatment of digital assets. With a new Labour leader anticipated shortly following Prime Minister Keir Starmer's resignation, maintaining policy continuity during this transition will be a crucial test for the UK's crypto ambitions. Ensuring that this agenda does not become a political pawn, as seen in other regions like the United States, is vital.
Note: The viewpoints expressed in this piece are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its affiliates.
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Digital assets recorded a third consecutive quarter of losses in Q2 2026, marking the longest losing streak since the 2022 bear market, as institutional investments shifted towards AI equities and Bitcoin ETFs experienced their largest quarterly outflow since inception. This report delves into the factors behind this divergence, areas of continued structural adoption, and key signals to monitor for Q3.
By CoinDesk ResearchJul 10, 2026Digital assets recorded a third consecutive quarter of losses in Q2 2026, marking the longest losing streak since the 2022 bear market, as institutional investments shifted towards AI equities and Bitcoin ETFs experienced their largest quarterly outflow since inception. This report delves into the factors behind this divergence, areas of continued structural adoption, and key signals to monitor for Q3.
Why it matters:
Digital assets recorded a third consecutive quarter of losses in Q2 2026, marking the longest losing streak since the 2022 bear market, as institutional investments shifted towards AI equities and Bitcoin ETFs experienced their largest quarterly outflow since inception. This report delves into the factors behind this divergence, areas of continued structural adoption, and key signals to monitor for Q3.
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