{"id":195081,"date":"2025-12-20T16:21:08","date_gmt":"2025-12-20T16:21:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/195081\/"},"modified":"2025-12-20T16:21:08","modified_gmt":"2025-12-20T16:21:08","slug":"fca-consultations-signal-new-market-rules-ahead-of-2027","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/195081\/","title":{"rendered":"FCA consultations signal new market rules ahead of 2027"},"content":{"rendered":"

The U.K.\u2019s long-promised crypto regulatory regime edged closer to reality this week, as the Financial Conduct Authority (FCA) unveiled its consultation<\/a> that will ultimately define how crypto firms operate in Britain.<\/p>\n

Together with legislation from HM Treasury<\/a>, the proposals form the backbone of a framework scheduled to take effect in October 2027. For policymakers, the objective is to balance growth and innovation with market integrity and consumer protection. For the industry, the challenge is navigating an 18-month transition period in which the destination is clearer than ever \u2014 but still some distance away.<\/p>\n

\u201cThis is it for the U.K.,\u201d Dea Markova, director of policy at crypto infrastructure firm Fireblocks, said in an interview. \u201cThis is the definitive regime for regulating the issuance and intermediation of crypto assets.\u201d<\/p>\n

From discussion to definition<\/p>\n

The latest consultations need to be viewed as part of a longer, carefully sequenced process, according to S\u00e9bastien Ferri\u00e8re, a financial regulation lawyer at Pinsent Masons.<\/p>\n

For more than a year, the U.K. has been working through a regulatory roadmap that expands the FCA\u2019s jurisdiction over crypto. The first step has been legislative: Treasury-defined regulated activities determine what falls inside the perimeter. Only then can the FCA impose authorization requirements and detailed rules.<\/p>\n

\u201cOver the last year, things have really started to take shape,\u201d Ferri\u00e8re said. \u201cWe\u2019ve been on a treadmill of consultations, but they are now forming a coherent framework.\u201d<\/p>\n

Earlier phases focused on stablecoin issuance and custody, prudential requirements such as capital and wind-down planning, and the application of existing FCA obligations \u2014 governance, systems and controls, operational resilience \u2014 to crypto firms. This week\u2019s consultations turn squarely to markets: trading platforms, intermediaries, staking, decentralized finance, admissions and disclosures, and crypto-specific market abuse rules.<\/p>\n

Taken together, Ferri\u00e8re said, the FCA is attempting to transpose the architecture of traditional financial regulation onto crypto markets, while tailoring it to reflect the technology\u2019s distinct risks.<\/p>\n

A hybrid regulatory model<\/p>\n

One of the most consequential design choices is the U.K.\u2019s decision to extend existing financial services rules to crypto, rather than writing a standalone rulebook from scratch as the European Union (EU) did with its Markets in Crypto-Assets (MiCA) regulation<\/a>.<\/p>\n

That distinction matters, but not in a simplistic way. Ferri\u00e8re described the FCA\u2019s approach as a hybrid. Cross-cutting obligations \u2014 principles of integrity, conflict management and fair treatment of customers \u2014 are being applied largely as-is. Market-facing rules, however, are being written specifically for crypto.<\/p>\n

\u201cThere is a new admissions and disclosures regime and a new market abuse regime,\u201d Ferri\u00e8re said. \u201cThey are not simply lifting the rules for securities and applying them wholesale. They echo the existing framework, but they\u2019re drafted to reflect the parameters of crypto assets and crypto services.\u201d<\/p>\n

The regulator, he added, is walking a tightrope. Being more permissive than in traditional markets would invite criticism that crypto is receiving preferential treatment. Being more restrictive could push activity offshore. The stated goal is \u201csame risks, same outcomes,\u201d even if the mechanics differ.<\/p>\n

Second-mover advantage and its limits<\/p>\n

For Markova, the U.K.\u2019s most important asset is timing. By moving after the EU and amid ongoing debate in the U.S., Britain has been able to observe how regulatory decisions play out in practice.<\/p>\n

\u201cThe U.K. is very proactively trying to learn lessons from other jurisdictions,\u201d she said. \u201cYou can see that in the proposals and in the political narrative.\u201d<\/p>\n

That narrative matters, Markova argued, because many decisions faced by banks and asset managers integrating crypto services are ultimately risk judgments made in areas where the law is not black and white. A supportive policy backdrop leads to different outcomes than one dominated by fear of enforcement.<\/p>\n

She also pointed to several areas where the U.K. has diverged from EU precedent, including explicit treatment of staking, lending and borrowing, and a more pragmatic recognition that crypto liquidity is global rather than tied to national venues.<\/p>\n

The unresolved pressure points<\/p>\n

Despite the progress, significant uncertainties remain \u2014 particularly around stablecoins and DeFi.<\/p>\n

On stablecoins, Markova said policymakers have acknowledged the need to distinguish between payments and investments, avoiding the trap of regulating merchants as financial intermediaries simply for accepting digital tokens. But deeper questions remain unanswered: how foreign-issued stablecoins will be treated relative to sterling-denominated ones, what due diligence obligations will fall on platforms, and how conservative settlement policy could affect adoption.<\/p>\n

DeFi poses an even harder conceptual challenge. The FCA has signaled that sufficiently centralized activity will be regulated like traditional intermediation. But many DeFi services are non-custodial by design.<\/p>\n

\u201cIdentifying a responsible entity and applying a custodial framework doesn\u2019t always address the actual risk,\u201d Markova said. \u201cThat\u2019s why DeFi regulation hasn\u2019t really been solved anywhere.\u201d<\/p>\n

Proportionality and global reach<\/p>\n

David Heffron, also a financial regulation lawyer at Pinsent Masons, framed the big-picture test as proportionality. The FCA insists it wants a competitive, innovative market, but the cumulative burden of conduct rules, operational resilience standards and capital requirements will shape how attractive the U.K. is to global firms.<\/p>\n

\u201cIt\u2019s too early to make a definitive call,\u201d Heffron said. \u201cBut this is a significant market, and I\u2019d be surprised if international operators didn\u2019t want access to U.K. liquidity.\u201d<\/p>\n

Ferri\u00e8re highlighted another issue likely to grow in importance: extraterritorial reach. Determining what constitutes \u201coperating in the U.K.\u201d is already complex in traditional finance. In crypto \u2014 inherently global and digital \u2014 firms may find themselves inside the regulatory perimeter sooner than expected, forcing decisions on geo-blocking, restructuring or establishing a U.K. presence.<\/p>\n

What success would look like<\/p>\n

From the FCA\u2019s perspective, success would mean more informed investors, reduced market abuse, higher confidence and sustainable competition. New admissions and disclosures rules are intended to standardize information about crypto assets, while market abuse provisions aim to address manipulation and information asymmetries \u2014 both prerequisites for deeper institutional participation.<\/p>\n

The cost is compliance, and the regime is explicitly not designed to eliminate risk. Instead, it seeks to ensure participants engage with crypto markets with clearer information and stronger safeguards.<\/p>\n

For now, the U.K. has crossed an important threshold: moving from endless \u201cframeworks\u201d to a concrete regulatory end-state. Whether its second-mover strategy delivers a competitive edge \u2014 or simply delays clarity \u2014 will become clear as firms decide whether to build for the U.K.\u2019s crypto future ahead of 2027.<\/p>\n","protected":false},"excerpt":{"rendered":"The U.K.\u2019s long-promised crypto regulatory regime edged closer to reality this week, as the Financial Conduct Authority (FCA)…\n","protected":false},"author":2,"featured_media":195082,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[114,69490,85,46,443,5899],"class_list":["post-195081","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-fca","tag-il","tag-israel","tag-uk","tag-uk-government"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/195081","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=195081"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/195081\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/195082"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=195081"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=195081"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=195081"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}