U.K. FCA Set to Finalize Crypto Industry Regulations by 2026

The Financial Conduct Authority (FCA) of the United Kingdom has announced plans to finalize comprehensive regulations for the cryptocurrency industry by 2026. This move follows extensive consultations with key stakeholders, including the Treasury, the Bank of England, and the U.S. Securities and Exchange Commission (SEC), as reported by Bloomberg on November 26.

The FCA is working on a regulatory framework that will cover various aspects of the crypto industry, including market abuse prevention, the regulation of trading platforms, lending, and stablecoins, among others. As part of its efforts, the FCA intends to begin consultations and discussions by late 2024, aiming to ensure the U.K. remains competitive with other global financial hubs like the U.S. and Hong Kong.

Matthew Long, Director of Payments and Digital Assets at the FCA, highlighted the importance of international collaboration, stating that recent conversations with industry players are focused on learning from regulations around the world. He emphasized that these discussions aim to develop rules that can foster a transparent, fair, and well-ordered crypto ecosystem.

In a blog post on the FCA's website, Long explained that feedback had been gathered from over 100 organizations across both the crypto and traditional financial sectors. These include crypto exchanges, banks, trading firms, blockchain analytics companies, and regulators like the Treasury and the Bank of England.

While the SEC has been criticized for its aggressive stance on crypto, especially under Chairman Gary Gensler, who oversaw 46 enforcement actions against crypto-related firms in 2023, the FCA seeks a balanced approach. Long stressed the importance of cracking down on market abuse to ensure financial markets operate efficiently and that investors can make informed decisions.

At the same time, the FCA aims to create a fair and transparent regulatory environment that supports the unique characteristics of the crypto market. Long emphasized that the FCA is committed to ensuring that its regulatory regime serves the best interests of clients, while also acknowledging that there is still much work to be done.

The FCA’s research reveals that cryptocurrency adoption in the U.K. is growing, with at least 12% of the adult population now owning crypto—up from 10% in previous studies. Additionally, awareness of cryptocurrencies in Great Britain has risen from 91% to 93%, highlighting the increasing mainstream acceptance of digital assets.

Long concluded by stressing the need for clear regulation that will support a competitive, secure, and sustainable crypto sector in the U.K. as the country positions itself to become a global leader in the crypto space.