The UK’s Financial Conduct Authority has launched a broad consultation on new rules for digital asset markets, signaling a decisive step toward fully integrating crypto into the country’s financial regulatory framework. The proposals span exchanges, intermediaries, staking, lending, borrowing and decentralized finance, with industry feedback invited until Feb. 12, 2026.
Published across three consultation papers, the FCA said the measures are designed to strike a balance between encouraging innovation and ensuring consumers clearly understand the risks of crypto products. The regulator stressed that the goal is not to eliminate risk entirely, but to create standards that promote responsible behavior, transparency and trust across the sector.
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David Geale, the FCA’s executive director for payments and digital finance, said the consultations are intended to shape a regime that protects users while allowing the industry to develop. He emphasized that feedback from firms and market participants will play a key role in determining the final rules.
Source: US SEC
Moving from promotions to full market structure
The consultations mark a shift away from the UK’s earlier, narrower approach to crypto regulation, which largely focused on financial promotions and anti-money laundering requirements. The new proposals aim to introduce full market-structure rules similar to those governing traditional financial markets.
Under the framework, crypto exchanges would be subject to clearer standards around token admissions, disclosures and trading integrity. The FCA is also seeking to align rules on market abuse, insider trading and manipulation more closely with existing financial regulations.
Staking services are another focus area, with the regulator asking how firms should disclose risks tied to yield-bearing products that involve locking up customer assets. Crypto lending and borrowing are also included, with proposed safeguards intended to protect both lenders and borrowers from excessive risk.
Decentralized finance is part of the conversation as well. The FCA is consulting on whether DeFi activities such as trading, lending and borrowing without intermediaries should be subject to similar expectations as centralized financial services, even as it acknowledges the technical and structural differences involved.
Geale cautioned that, despite the consultations, most crypto activity in the UK remains largely unregulated for now, aside from rules covering promotions and financial crime.
Crypto set to fall under UK financial law
The FCA’s move follows a broader policy signal from the UK government. Just a day earlier, the Treasury announced plans to introduce legislation that would extend existing financial services laws to crypto assets by 2027, formally bringing the sector under the FCA’s supervision.
According to reports, the legislation could be introduced by October 2027, placing crypto firms within the same regulatory perimeter as other financial institutions. Chancellor Rachel Reeves described the move as a critical step in maintaining the UK’s status as a leading global financial center as digital assets become more mainstream.