After months of consultation and industry lobbying, Britain’s financial watchdog has locked in its rulebook for cryptoassets, with the regime taking effect on October 25, 2027.
The shift primarily centers on capital requirements for stablecoin issuers. Following pushback from the industry, the FCA in a major development also scaled back what firms will need to hold in reserve, dropping the requirement from 2% down to 1% of the volume of stablecoins issued.
David Geale, the FCA’s executive director for payments and digital finance, was candid about why the change happened. “The feedback we got (was) that we’re starting a bit high,” he told journalists. Regulators acknowledged the original threshold had simply been set too steep for issuers to realistically meet.
The reduced capital figure is meant to strike a balance: keep the regime proportionate without putting UK-based stablecoin businesses at a disadvantage globally. Firms recognized by the Treasury as systemic stablecoin issuers won’t escape further scrutiny entirely, though, as the FCA and Bank of England plan a separate consultation targeting that category specifically in 2026.
Capital wasn’t the only thing that got revised. The FCA also extended the timeline firms have, in certain situations, to return customer funds when stablecoins are redeemed, and it scrapped several public disclosure requirements that had appeared in the earlier draft of the rules.
Geale framed the broader rollout as a milestone for UK crypto oversight. “For the first time, we’ve got a comprehensive regulatory framework for crypto in the UK, one that covers how firms trade, how they hold assets, serve consumers and manage risk,” he said.
He also tied the new rules back to existing financial regulation more broadly, noting the framework “applies the same core principles we use across financial services. So where we see the same risk … we’re looking for the same regulatory outcomes.”
As per the official FCA statement, the final version of the rules reflects feedback gathered through the consultation process, and the FCA pointed specifically to simplified capital rules for stablecoin firms and trading requirements reshaped to better match how crypto markets actually function day to day.
