UK Authorities Aim to Strike a Balance Between Advancing Crypto Technology and Maintaining Public Confidence

The UK Financial Conduct Authority (FCA) has launched a consultation to determine if crypto businesses should adhere to the same regulatory requirements as conventional

, while also considering exemptions that recognize the distinct nature of cryptocurrencies. Consultation paper CP25/25 aims to develop a regulatory approach that encourages innovation but maintains market reliability and consumer confidence. This move fits within the UK’s larger plan to incorporate digital assets into the existing financial regulatory system.

The FCA is evaluating how its current Handbook rules can be extended to cover cryptoasset operations, including expectations for governance, anti-financial crime frameworks, and operational stability. The introduction of environmental, social, and governance (ESG) standards is also under review. A primary topic in this consultation is whether the FCA’s Consumer Duty should apply to crypto, requiring companies to ensure positive outcomes for their clients. The FCA is also gathering perspectives on complaint management, such as whether customers should be able to escalate disputes to the Financial Ombudsman Service.

The FCA’s recommendations are designed to implement baseline requirements for crypto companies, enabling them to align with established standards, although this will not eliminate all investment risks associated with crypto. David Geale, the FCA’s executive director of payments and digital finance, noted that while these changes will not remove every risk, they are intended to foster greater trust in the industry. The FCA will organize both in-person and online forums to encourage industry participation and collect input from a broad spectrum of interested parties, such as digital asset firms, trade organizations, and lawmakers.

The consultation features two main deadlines: feedback on topics like consumer duty and complaint procedures must be submitted by October 15, 2025. Comments on the overall consultation should be provided by November 12, 2025. The FCA will analyze all responses and release the finalized regulations in 2026. This step comes after the FCA ended its prohibition on crypto exchange-traded notes (ETNs) for retail clients as of October 8, now permitting access to ETNs listed on FCA-approved UK markets under strict promotional guidelines.

The UK’s regulatory stance on cryptocurrencies is shifting, with the FCA suggesting a new “gateway regime” for 2026 to approve crypto firms and establish final policies for stablecoins and asset custody. The UK is also working closely with the United States to harmonize digital asset regulations, with Chancellor Rachel Reeves and US Treasury Secretary Scott Bessent discussing ways to improve joint oversight of crypto. This partnership includes discussions with leading crypto companies and established financial institutions. The UK’s regulatory model could become an example for other countries seeking to balance technological advancement with consumer safeguards.