The UK Future Cryptoasset Regulatory Framework

This short blog post sets the scene and explains the likely scope of regulation and the licensing impact for cryptoasset firms. At the time of publishing this blog post the FCA has just released a Discussion Paper covering its approach to regulating some cryptoasset activities, and we will cover this in our next blog post.

What is the legislation?

The draft Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025 (RAMPCO) sets out the legal basis for the Financial Conduct Authority (FCA) to regulate a range of cryptoasset and stablecoin activities in the UK.

The government is currently seeking feedback on the technical drafting of the legislation, and industry participants have until 23 May to respond. 

The timing for the new regime to take effect is not specified at this stage.

Which activities and cryptoassets are regulated?

RAMPCO requires the FCA to impose a licensing and conduct regime on firms which perform the following activities in relation to “qualifying cryptoassets”: 

• Issuing stablecoins – this includes offering or redeeming stablecoins created by or for the offeror/redeemer, activities designed to maintain the stable value of a stablecoin;
• Safeguarding (i.e. custody of) cryptoassets or arranging, for example, for an unlicensed offshore entity to perform custody;
• Operating a cryptoasset trading platform;
• Dealing in cryptoassets as principal or agent;
• Arranging deals in cryptoassets; and
• Arranging for cryptoasset staking services (this does not cover the staking itself).

To be within scope, the activities above must be performed in relation to cryptoassets which are fungible and transferable, and certain assets are excluded such as electronic money, fiat currency, central bank digital currencies and cryptoassets which can be used only in a limited network.

Stablecoins are defined as qualifying cryptoassets that reference a fiat currency (or a mixture of fiat and other assets) and seek to maintain a stable value through backing assets.

The safeguarding/custody activity above will extend beyond qualifying cryptoassets to also cover custody of tokenised forms of certain other financial instruments that may already be regulated.

Other Changes

RAMPCO also amends legislation such as the Money Laundering Regulations, Financial Promotions Order and Electronic Money Regulations. Firms will need to give careful thought to how they are impacted by the interaction between those amended regimes and the new cryptoasset licensing framework.

What is the territorial scope?

The draft regime has a broad territorial reach. Firms which offer cryptoasset or stablecoin related services to UK customers may be caught by the new rules even if they are based overseas. That said, carve-outs apply to some firms which, for example, deal exclusively with institutional clients or act through licensed intermediaries.

What is the roadmap to authorisation?

The FCA and PRA are empowered to issue rules and guidance for the operationalisation of the regime.

The FCA will also need to set a period ahead of commencement of the licensing regime during which firms can submit applications for authorisation. For firms that fail to secure the necessary permissions, there may be a permitted wind down period.

Next steps

The draft legislation is just the beginning. At the time of publishing this blog post the FCA has just released a Discussion Paper covering its approach to regulating cryptoasset trading platform, intermediation, cryptoasset lending and borrowing, staking and decentralised finance (DeFi), and we will cover this in our next blog post. We expect the FCA will publish at least one further consultation paper in the upcoming weeks. We also expect the UK government or FCA to explain the timeline for implementation of the new regime in due course. For now, firms should submit any technical comments on the drafting of the regulation by 23 May, and continue to monitor developments. We will provide updates as the regime evolves and further details emerge.