🧐 United Kingdom🇬🇧: regulator publishes final crypto regulatory framework

🧐 United Kingdom🇬🇧: regulator publishes final crypto regulatory framework

The new measures include mandatory licensing for crypto companies, capital stress testing, enhanced rules against market manipulation and insider trading, as well as simplified capital requirement standards for stablecoin issuers. Overall, they will be subject to the same requirements applied to other financial service providers in the country.

➡️ The FCA licensing period will open in September 2026 and close on February 28, 2027. The new regime will enter into force on October 25, 2027. It will apply to all platforms, custodians, stablecoin issuers, staking companies and other intermediaries.

➡️ Crypto firms currently operating under AML registrations will not be automatically transitioned to the new licensing regime. Instead, they will be required to complete the full authorization process again. However, they will be permitted to continue operating during the transition period under the framework's transitional provisions.

➡️ With regard to stablecoins, the requirement to provide projected redemption amounts has been removed, while a legally recognized trust-based reserve management structure has been introduced. In addition, unallocated safeguarding accounts have been excluded from the framework.

➡️ In addition, issuers will be required to provide users with specific withdrawal rights, allow a 5% excess reserve pool of backed assets, and permit limited intra-group custody arrangements, provided that security measures are respected.

➡️ Questions remain over how the FCA's rules will apply to issuers designated by HM Treasury as systemically important.

➡️➡️ Preliminary consultations with industry participants will begin next month. A dedicated webinar is scheduled for July 17, and later this year the FCA will launch a separate consultation on DeFi and operational resilience guidance for firms using DLT.

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