Cryptocurrency Regulations in the UK for Investors in 2026

Imagine logging on to your favourite platform and seeing a clear badge that tells you it meets new standards. A small café owner I know felt the same relief when her bank upgraded its online security. That feeling simple, steady confidence is what the coming change aims to give you.

The draft Order published on 29 April 2025 brings qualifying cryptoassets and stablecoins into the FSMA perimeter. The FCA will set detailed rules, from the new CRYPTOPRU prudential sourcebook to custody standards similar to CASS.

From late 2025 applications open, and the regime may go live in 2026. That shift pulls crypto into the mainstream financial services framework and affects trading platforms, custody firms and business models you use.

In this guide you will get clear information on which parts of the market change most, what requirements to expect, and practical steps to protect your assets and plan future investment.

Why the 2026 UK crypto regime matters to you

The new approach folds crypto into the same system that already governs banking and markets, rather than creating a separate set of rules. That choice shapes what you should watch for when you pick platforms, products and counterparties.

Your search intent: what you’ll learn and how to apply it

You will get practical information about how expanded financial services markets supervision changes disclosure, custody and conduct. The Draft Order and HM Treasury policy note point to six new regulated activities and a clear focus on transparency, consumer protection and operational resilience.

How the UK approach differs from MiCA

The UK relies more on secondary rulebooks think conduct rules, CRYPTOPRU prudential standards, market abuse and enhanced disclosure rather than a single statute. That means higher operational standards for firms and tighter accountability via the Consumer Duty and SMCR.

• You’ll see why migration may raise short-term frictions as legacy services adapt.
• You’ll know which consultation topics to track: trading platforms, intermediaries, staking, lending/borrowing, DeFi and credit use.

Inside the new framework: how crypto is being woven into FSMA

The RAO expansion is the legal hinge that brings many digital assets into the same specified‑investment framework as shares and bonds. This change is not just a paper tweak: it creates a clear pathway from a short statutory instrument to a full FCA rulebook.

From draft Order to full rulebook: RAO expansion and FCA handbooks

The Draft Order inserts Chapter 2B into the RAO and defines a qualifying cryptoasset and a qualifying stablecoin. Once classed as a specified investment, these assets fall within established financial services law.

“Qualifying cryptoassets” and “qualifying stablecoins” as specified investments

Six new regulated activities cover trading platforms, dealing, arranging, custody, staking and stablecoin issuance. The FCA will publish practical rules in handbooks such as CRYPTOPRU and a crypto‑CASS style custody regime.

Consumer Duty and SMCR: accountability lands in crypto

When firms are authorised, the Consumer Duty and SMCR attach. That means clearer governance, person‑level accountability and outcome‑focused requirements for the businesses you use.

For a concise legal perspective, see this detailed legal note.

Which cryptoassets are in scope in 2026

The coming framework focuses on tokens that are fungible, transferable and used in investment-like ways. That test decides whether an asset sits inside the FSMA perimeter or falls to another legal regime.

Qualifying cryptoassets are a subset of FSMA cryptoassets. They must be fungible and transferable. They exclude tokens already treated as specified investment, such as tokenised equity or bonds.

Qualifying cryptoassets vs specified‑investment cryptoassets

You will see the difference in practice: tokens that look and act like securities will be captured as specified investment. Broader tokens used for trading or holding become qualifying cryptoassets and face the new rules.

What’s out of scope: tokenised deposits, e‑money and true self‑custody

Certain instruments remain outside this regime. Tokenised deposits and e‑money follow payment and deposit law instead. True self‑custody where no third party can unilaterally transfer your asset is also excluded.

• Why this matters: scope determines which protections and obligations apply to your transactions and which disclosures you should expect.
• Stablecoins: qualifying stablecoins reference fiat and hold backing assets, so their redemption and disclosure rules will be stricter.

For legal detail on how these lines may be drawn during consultation, see this consultation note.

New regulated activities you’ll see across the market

From marketplaces to custody desks, a new suite of authorised activities will reshape how platforms and service providers operate.

Operating a trading venue

Running a qualifying cryptoasset trading platform (CATP) becomes a named activity. That covers order‑book venues, RFQ systems and AMM‑style matching that facilitate transactions in qualifying tokens.

Dealing as principal and agent

Dealing as principal captures market‑making and activities that include lending and borrowing for yield. Agency dealing covers broking and matched‑principal execution you use daily.

Arranging deals and carve‑outs

You will see arranging arrangements include front‑ends and introducers that set terms or match counterparties. Simple communication‑only software can stay out of scope, but the line is tight.

Safeguarding and custody

Custody rules trigger when a firm can unilaterally transfer your assets keys, MPC shares or rights of redelivery. Expect segregation, reconciliation and trust arrangements to protect you as a client.

Staking services

Providers making arrangements for staking, including delegated, pooled and liquid staking, must seek authorisation where they create or control the stake. Prudential and conduct rules will then apply.

"Check firm permissions on the register before you trust a service with your tokens."

Territorial scope: how UK rules catch overseas firms

When a platform serves someone in Britain, it can trigger local authorisation rules even if the firm sits overseas. If you are a UK person or consumer who uses the service, that single connection can bring the provider into scope for trading and other activities.

Which activities pull a foreign firm in? Operating a trading venue, dealing as principal or agent, and arranging deals all need UK authorisation when aimed at you. Safeguarding and staking on your behalf can also require permission, with a narrow safeguard exception for some custody models.

Stablecoin issuance requires UK permission only where the issuer has a UK establishment. The traditional overseas persons exemption is narrow and will not shield most retail‑facing platforms.

Practical signals to look for: a named UK entity, FCA permissions, clear information on complaints and protections, and UK‑specific terms. Firms may geo‑block or route you via a UK entity to meet requirements.

"Check a firm's permissions and complaints handling before you trade or deposit assets."

Financial promotions, AML registration and the evolving perimeter

From mandatory risk statements to cooling‑off windows, promotion rules are changing the way offers reach consumers.

The Financial Promotion Order will apply to the new crypto activities, so adverts and onboarding screens must carry clear risk warnings and evidence of prior approval.

RMMI rules continue: risk warnings, cooling‑off and approvals

The FCA’s Restricted Mass‑Market Investment regime remains in force. That means mandatory risk flags, a cooling‑off period and an approver’s sign‑off before marketing to mass retail audiences.

What you should look for: an approver’s name, dated approval and a clear explanation of risks in plain language.

MLRs alignment: notifications, registration changes and ongoing duties

Transitional relief for MLR‑registered crypto firms to self‑promote will be removed. MLR amendments mean authorised firms with new permissions won’t need separate AML registration.

However, firms must notify the FCA when acting as a cryptoasset exchange or custodian wallet provider. They must also continue to meet money laundering duties such as due diligence, transaction monitoring and suspicious activity reporting.

• Check: FCA permissions on the register before you respond to a promotion.
• Expect: extra onboarding questions and clearer disclosures to protect you from hasty choices.

"Approved promotions with clear risk warnings and approver details reduce your exposure to unvetted offers."

Prudential capital, liquidity and custody standards investors should expect

The proposed rule set places fresh emphasis on capital, liquidity and custody to limit contagion when problems arise.

CRYPTOPRU aims to make firms resilient. Expect tiers of own funds, a permanent minimum for stablecoin issuers and custodians, a fixed overheads requirement and K‑factor style components that link capital to activity levels.

What this means for you: platforms must hold liquid buffers and monitor concentration risk so client assets are less likely to be hit by a firm shortfall.

CRYPTOPRU: own funds, fixed overheads and K‑factor style requirements

Own funds will combine permanent minimums with variable add‑ons tied to trading and other activities. Fixed overheads cover running costs so a firm keeps going through stress.

Client asset protections: segregation, reconciliation and trusts

Custody rules require segregation of client assets, daily reconciliation, accurate books and robust governance. Trust arrangements and audit‑ready records aim to make recovery and redelivery clearer.

"Stablecoin issuers must back coins with secure, liquid assets and offer redemption in money."

Expect increased reporting on reserves, capital and safeguarding so you can compare standards across firms and choose safer platforms.

Staking, lending and borrowing: risk controls the FCA is proposing

How platforms handle staking, lending and borrowing will determine whether you face added protections or new restrictions. The FCA’s DP25/1 proposals focus on keeping retail users safe when firms offer yield or credit‑backed purchases.

Retail safeguards for staking include explicit client consent, a short key features document and separate wallets for staked tokens. Firms arranging staking may need extra capital where they rehypothecate or control stakes.

Why this matters to you: those steps reduce the chance that platform losses are passed to clients and make it easier to trace and recover assets.

Credit for buying crypto: likely limits and stablecoin carve‑outs

The FCA is exploring limits on using credit to buy tokens, such as banning direct credit‑card purchases. A possible exception is qualifying, fiat‑backed stablecoins issued by authorised firms.

The paper also sets out two activity models: cryptoasset lending and cryptoasset borrowing. Retail access to some current lending arrangements may be restricted unless firms strengthen disclosures and suitability checks.

"Expect clearer risk warnings, cooling‑off and suitability‑style checks before you opt into higher‑risk yield services."

• Check whether a staking service shows validator details, slashing risk and liquidity for any liquid staking token.
• Ask who can move your tokens and how redemptions work if a firm fails.
• Confirm extra capital or segregation is in place when a firm arranges staking or lending.

Main changes in cryptocurrency regulations UK investors will feel

Big shifts are coming: stablecoin backing, public reserve reporting, and market‑abuse rules that mirror securities practice. These changes focus on clearer rights for holders, tighter venue oversight and better public information so you can judge product strength.

Stablecoin issuance: backing, redemption and disclosure

Issuers must hold secure, liquid assets in a statutory trust and enable redemption in money to all holders. That means you should see regular statements about the reserve composition and a clear redemption policy.

Why it matters: published reserve details and redemption terms make it easier to check resilience and compare stablecoins before you use them.

Market abuse, admissions and ongoing disclosure

The government will extend market abuse rules to qualifying cryptoassets and introduce admissions and disclosure regimes like those used for listed securities.

Exchanges will need surveillance and reporting systems to detect insider trading, wash trades and other manipulative activity. That should reduce disorderly behaviour and improve execution quality.

"Expect clearer issuer information, prospectus‑style documents for many tokens and tighter governance at authorised venues."

• You’ll see stronger protections around stablecoins: backing, redemption and regular reporting.
• Trading venues will tighten governance, surveillance and disclosure for token admissions.
• Consultations in 2025 (DP25/1; CP25/14; CP25/15) will feed final rules aimed at 2026 implementation.

Your 2026 action plan: prepare, diversify information sources and stay compliant‑minded

Make a practical plan: 2026 will bring firm authorisations, new reporting duties and tighter custody standards that affect how you access the market.

As consultations close and CPs land, assemble a short checklist. Interrogate your firm’s permissions, capital plans under CRYPTOPRU, custody arrangements and Consumer Duty governance. Map the key requirements that touch your accounts and token servicing.

Diversify your information official consultation papers, policy statements, audited reports and independent analysis. Ask providers about incident response, segregation, reconciliation cadence and how client assets are returned in stress.

Benchmark providers by authorisation status, activity permissions and clarity of public information. Keep calendar reminders for consultation deadlines so you can adjust positions before rules and reporting change.

Stay compliant‑minded and keep records: download statements, track fee changes and use approved channels when dealing with crypto activity.