The United Kingdom has taken a major step toward comprehensive crypto regulation, with the Financial Conduct Authority(FCA) opening a wide-ranging consultation that outlines proposed rules for exchanges, staking providers, lending platforms and parts of decentralized finance. The move follows new secondary legislation from the UK Treasury that formally brings crypto activities into the country’s financial services framework, with an implementation target of Oct. 25, 2027.
The consultation marks a shift from the UK’s fragmented oversight model toward a full market structure regime. Until now, crypto firms have primarily operated under anti money laundering requirements and strict financial promotion rules, without a single framework governing how crypto markets function end to end. The FCA’s proposals aim to close that gap by defining how firms operate, how risks are managed and how consumers are protected across the sector.
In a recent episode of Cointelegraph’s Byte-Sized Insight podcast, Perry Scott, head of UK policy at Kraken and chair of the UK Cryptoasset Business Council, described the consultation as a long awaited moment for the industry. He highlighted both the scale and clarity of the proposals, noting that they span hundreds of pages and come with a firm timeline that signals a move from regulatory uncertainty to active preparation.
FCA consultation signals shift to full crypto market structure
At the core of the FCA consultation is market structure, particularly the regulation of crypto exchanges and how they access liquidity. Scott welcomed the regulator’s acknowledgment that crypto markets are global by nature, arguing that allowing access to global liquidity pools can support better execution outcomes for UK consumers. This recognition aligns the UK more closely with how major crypto markets already operate, while still placing them under domestic supervisory standards.
Staking is another area where the UK is charting a distinct path. Earlier in 2025, the country became one of the first major jurisdictions to clearly separate staking from traditional financial services activities. Under the new proposals, staking services would be governed by bespoke requirements rather than being forced into existing investment frameworks. Scott described this approach as world leading, suggesting it could give the UK a competitive edge if implemented effectively.
Lending and other crypto related services are also covered, reflecting the FCA’s intent to regulate the sector as an integrated market rather than through isolated rule sets. The consultation is open until Feb. 12, giving firms several months to respond and adjust their internal plans.
Industry participants are already preparing for the changes. Scott said UK firms are unlikely to wait until the final rules are published, as regulatory certainty could drive significant hiring across compliance, legal and technical roles. He suggested the framework could support the creation of hundreds, and potentially thousands, of jobs as companies build systems to meet FCA standards.
As the UK positions itself between the European Union’s Markets in Crypto Assets Regulation and renewed regulatory momentum in the United States, the outcome of this process could shape its role as a global crypto hub. A clear, workable framework could attract firms seeking regulatory certainty, while delays or overly restrictive rules could risk pushing innovation elsewhere.
The FCA consultation represents a defining moment for the UK crypto market. With a clear timeline and a move toward full oversight, the next two years are likely to determine whether the country can balance consumer protection with competitiveness in a rapidly evolving global industry.
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