Beat the Clock: UK Crypto Firms Have 12 Months to Prepare for FCA Shakeup

TLDR

Table of Contents

FCA intends to begin authorizing crypto firms under a stricter regulatory regime by 2026
Only 14% of applicants (50 out of 368) have been approved under current anti-money laundering register
Coinbase has secured FCA registration, enabling it to offer both crypto and cash services in the UK
New rules will include regulations for stablecoins, trading platforms, staking, and more
Companies may need to reapply for authorization even if they already have existing licenses

The UK’s Financial Conduct Authority (FCA) is preparing to implement a stricter regulatory regime for cryptocurrency companies starting in 2026. This marks a major shift from the current anti-money laundering (AML) requirements to a more comprehensive authorization system.

Matthew Long, director of payments and digital assets at the FCA, confirmed the plans in an interview with CoinDesk. The new regime will require crypto firms to undergo a fresh application process. This includes companies like Coinbase, Gemini, and Bitpanda.

The change represents a leap forward in regulation. Currently, crypto businesses only need to register for anti-money laundering compliance. The upcoming regime will introduce rules for a wide range of offerings.

What’s Coming in 2026

The FCA plans to release several policy papers throughout this year. These will cover stablecoins, trading platforms, staking, and prudential crypto exposure. The full regime is expected to go live after final policies are published in 2026.

The process has been selective so far. Since opening its anti-money laundering register in 2020, the FCA has received 368 applications. Only 50 firms – just 14% of applicants – have been approved.

Many companies may need to start their application process from scratch. This includes those who already hold licenses under the current system.

Stablecoins will receive special attention in the new framework. The FCA is taking a thoughtful approach to regulating these digital assets.

“What we’re doing in terms of the stablecoins is we’re making sure that we take the best from the current regulation that exists in TradFi, but stablecoins are ultimately unique,” Long explained. “There isn’t anything that is exactly the same. We’ve got to adapt the regulation that we’ve currently got.”

Previously, stablecoins were set to fall under UK payment regulations. This plan changed in November when former Economic Secretary Tulip Siddiq announced a different approach.

The Transition Process

The FCA is still working out details for how crypto companies will move to the new system. Long indicated that companies already registered under the money laundering regime may need to apply for wider permissions.

The process could be lengthy, even for businesses with existing licenses.

“We’ll be communicating with firms about what the gateway will look like before it goes live, our intention is to bring it live as soon as humanly possible,” Long stated.

The regulator is looking at other models for guidance. This includes Europe’s crypto legislation and recommendations from the International Organization of Securities Commissions (IOSCO).

While many firms prepare for the upcoming changes, Coinbase has already achieved a major milestone. The exchange recently secured registration with the FCA.

This registration allows Coinbase to offer both cryptocurrency and cash services to UK customers. It represents a key development in the company’s UK operations.

The achievement is particularly impressive given the FCA’s strict standards. Coinbase overcame regulatory hurdles to earn its place on the register.

Keith Grose, Coinbase’s UK CEO, views the registration as an opportunity for growth. “It opens up new channels and opens up the ability to launch new products and services,” he stated.

The registration enables Coinbase to integrate fiat and cryptocurrency services. This creates a more seamless experience for UK users.

A Coinbase spokesperson highlighted the impact: “Our new U.K. VASP registration will mean that CBPL can not only continue to provide our customers with fiat services, but now can also provide crypto services.”

Coinbase’s journey to registration wasn’t without challenges. In October 2020, the company entered into a voluntary requirement with the FCA due to concerns about its financial crime control framework.

Despite these obstacles, Coinbase demonstrated its commitment to compliance. This dedication helped secure its position on the FCA register.

The success story stands in contrast to the overall approval rate. With only 14% of applicants succeeding, Coinbase’s achievement underscores its regulatory diligence.

Future Opportunities

Beyond immediate service enhancements, Coinbase’s registration opens channels for communication with regulators. This dialogue will be crucial as the company explores new initiatives.

Grose emphasized the importance of this relationship for future developments: “We’re excited to talk about things like staking, the future of stablecoins in the U.K., and being [virtual asset service provider] registered is part of that for us.”

This proactive approach positions Coinbase to play a key role in shaping the UK’s crypto landscape. It aligns with the company’s broader vision for growth in the market.

For the wider crypto industry, the upcoming authorization regime requires careful preparation. Companies have approximately 12 months to get ready for the stricter requirements.

The transition from simple registration to full authorization represents a maturation of the UK crypto market. It brings cryptocurrency services closer to traditional financial regulation.

Companies that wish to operate in the UK will need to allocate resources to compliance. This includes understanding the new rules and building systems to meet them.

The UK’s approach to crypto regulation doesn’t exist in isolation. The FCA is examining international best practices as it develops its framework.

Europe has already launched bespoke legislation for the crypto sector. The IOSCO has published 18 recommendations for crypto regulation.

These global developments provide context for the UK’s efforts. They represent a trend toward more comprehensive regulation of digital assets worldwide.

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