The cryptocurrency sector in the U.K. has a little over a year to brace itself for a more rigorous regulatory framework, according to a high-ranking official from the nation’s finance authority.
Matthew Long, the head of payments and digital assets at the Financial Conduct Authority (FCA), shared in a conversation that the forthcoming “gateway regime” anticipated for 2026 will introduce a new authorization process for cryptocurrency firms.
“We will establish a gateway that facilitates authorization. However, we still need to conduct consultations, develop those regulations, and enact the necessary legislation,” Long stated.
This new framework represents a significant shift from the current anti-money laundering (AML) regulations. For instances, cryptocurrency exchanges such as Coinbase, Gemini, and Bitpanda will transition from merely registering with the country to adhering to a comprehensive authorization system, which will involve a new application process to obtain FCA approval.
This year, the FCA plans to publish papers addressing topics like stablecoins, trading platforms, staking, and prudential crypto exposure. The regime is expected to launch following the release of final policy documents in 2026, as per Long.
Since the launch of its AML registration for businesses in 2020, the FCA has received 368 applications from firms aiming for compliance. However, only 50 firms — approximately 14% of applicants — have secured approval so far, meaning many will need to restart their registration processes.
Read more: U.K. Financial Regulator Aims for Crypto Regime by 2026
Regulated Activities
According to Long, new legislation will clarify what constitutes a regulated activity, requiring companies involved in those activities to seek authorization.
A 2023 government paper suggested that regulated activities would likely encompass the issuance of both crypto and fiat-referenced stablecoins, along with payment, exchange, and lending operations.
Former Economic Secretary Tulip Siddiq indicated in November that stablecoins will not fall under the existing U.K. payments regulations as previously outlined. The FCA plans to issue a consultation on draft guidelines for stablecoins early this year.
“In terms of stablecoins, we’re ensuring that we incorporate the best elements of current regulations from traditional finance, but recognizing that stablecoins possess unique characteristics,” Long explained. “There’s nothing exactly analogous. It’s essential to modify our existing regulations accordingly.”
Read more: UK to Draft a Regulatory Framework for Crypto, Stablecoins Early Next Year
Transition
The FCA is still determining the authorization process that crypto businesses will need to follow, as stated by Long.
He also mentioned that it remains unclear what actions will be required from companies already registered under the AML regime, but the new framework will come with broader permissions. Thus, companies seeking additional permissions will likely need to apply for them.
This implies that firms may face a lengthy registration process, even if they have previously obtained a license.
“We will be in touch with firms about the details of the gateway prior to its launch; our goal is to implement it as swiftly as possible,” Long said, referring to the authorization framework.
In shaping its approach, the regulator intends to take cues from Europe, which has begun implementing tailored legislation for the crypto sector, and from the International Organization of Securities Commissions’ 18 recommendations. IOSCO is expected to soon release insights about how countries are adapting to its standards, according to a source familiar with the situation.
“It’s about understanding and identifying best practices,” Long remarked.
Read more: UK Crypto Firms and Regulator Blame Each Other for Industry Exodus