Rich by Coin

The United Kingdom is advancing a comprehensive regulatory framework for cryptocurrency, with a planned rollout by 2026. Led by UK Finance and the Financial Conduct Authority (FCA), the proposal would fold crypto activities into the Financial Services and Markets Act (FSMA), focusing on stablecoins, custody, and trading platforms. The regime embraces a “same risk, same regulatory outcome” philosophy, aiming to protect consumers and market integrity while aligning crypto rules with traditional finance.

The new regime presents both opportunities and challenges for Asian fintech startups seeking access to the UK market. Advantages include market access to a large retail audience, greater investor confidence through a defined framework, and regulatory harmonization that can streamline cross-border strategies. Disadvantages include higher ongoing compliance costs, licensing requirements for onshore activities, and regulatory uncertainty as the regime evolves.

Separately, NFT regulation under the main regime excludes non-fungible tokens from FCA authorization and AML mandates, potentially lowering entry barriers for NFT marketplaces and digital art platforms. The Property (Digital Assets etc) Act 2025 will classify NFTs as personal property, providing some clarity while keeping certain legal avenues for theft or misuse. Still, regulators may tighten oversight if NFT markets grow systemically, which could shape future guidance and risk management.

Some analysts warn that larger institutions may benefit more than smaller firms, given the scale required to meet compliance demands. The new rules can create hurdles for smaller crypto businesses while advantaging well-capitalized players. Countries considering similar frameworks can learn to adopt a risk-based approach, engage industry stakeholders in phased consultations, embed prudential safeguards, offer regulatory clarity, and layer new rules over existing regimes to minimize disruption.

As the UK presses forward, clarity and market access for crypto firms coexist with substantial compliance burdens and potential barriers for smaller entrants. The approach offers a template for balancing innovation with consumer protection, potentially shaping global standards in a rapidly evolving crypto landscape.