The Financial Conduct Authority, the UK’s financial regulator, is seeking views on certain crypto activities in the latest discussion paper under its crypto roadmap. Specifically, the FCA is soliciting feedback from individuals, firms, industry groups, policymakers, academics and think tanks on the regulation of trading platforms, intermediaries, lending and borrowing, staking and decentralized finance ahead of legislation to bring them within regulation.
As more people use credit to buy crypto, the discussion paper also explores whether restrictions should be introduced on such practices, per a statement on Friday.
“Clear crypto regulation will boost confidence in the sector, supporting growth,” the FCA said. “Crypto is a growing industry. Currently largely unregulated, we want to create a crypto regime that gives firms the clarity they need to safely innovate, while delivering appropriate levels of market integrity and consumer protection,” FCA Executive Director of Payments and Digital Finance David Geale added. “Our aim is to drive sustainable, long-term growth of crypto in the UK. We’re asking whether we have got the balance right.”
This is the latest policy publication under the FCA’s crypto roadmap — which aims to provide a clear timeline for consulting on future crypto regulation. The FCA has already conducted discussion papers on the issuance and custody of stablecoins, market abuse, admissions and disclosures and prudential considerations and plans to issue formal consultation papers later this year, following feedback from the discussion papers.
The process builds on draft legislation from the UK Treasury Department that, once enacted, will bring certain crypto asset activities under the FCA’s oversight. Feedback is open until June 13.
UK approach to crypto regulation
The UK has adopted a phased approach to crypto regulation, aiming to position itself as a global hub for digital assets while prioritizing consumer protection and financial stability.
Beginning with anti-money laundering oversight in 2020, the regulatory framework has expanded to include a ban on the sale of crypto derivatives to retail consumers in 2021 and the extension of financial promotions rules to crypto assets in 2023. Comprehensive regulations covering stablecoins, trading platforms, lending, staking and custody are currently under consultation, with full implementation expected in 2026. However, in January, the UK Treasury did clarify that crypto staking is exempt from the rules governing collective investment schemes, such as exchange-traded products.
FCA crypto roadmap. Image: FCA.
UK eager to work with crypto-friendly US government on driving growth
Earlier this week, the UK Treasury said it is eager to work with the crypto-friendly U.S. government to better support innovation across the burgeoning industry — contrasting a more hostile approach from the EU.
“For the UK to be a world-leader in digital assets, international cooperation is vital,” UK Chancellor of the Exchequer Rachel Reeves said in a recent speech at the Innovate Finance Global Summit. “Firms offering services for crypto assets like Bitcoin and Ethereum will be subject to new, clear rules, boosting investor confidence and driving growth through the ‘Plan for Change,'” she added — which aims to drive growth, innovation and security in the digital asset sector.
Reeves and U.S. Treasury Secretary Scott Bessent recently met in Washington D.C., where they discussed collaboration around digital assets.
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