Britain’s Financial Conduct Authority has launched a consultation on guidance for the UK’s future crypto regime, as the regulator moves toward opening authorizations for crypto firms later this year. 

The FCA said the consultation is intended to help firms understand when authorization will be required under the new regime and which cryptoasset activities will fall within scope. The paper covers the FCA’s interpretation of regulated activities including issuing qualifying stablecoins in the UK, safeguarding cryptoassets, operating crypto trading platforms, dealing and arranging deals in qualifying cryptoassets, and staking. 

While the FCA’s current crypto remit is largely limited to financial promotions and preventing financial crime, the regulator is preparing for a broader supervisory role under the future regime. In separate wider proposals, the FCA has said crypto firms would be subject to broader handbook standards, including governance, operational resilience, and stronger systems and controls to fight crime. 

Firms and individuals engaged in the new regulated activities will need to apply for FCA authorization before operating in the UK, under the plan. 

The FCA said businesses providing in-scope cryptoasset services in the UK must remain registered under the Money Laundering Regulations (MLR) until the Financial Services and Markets Act (FSMA) regime begins. Under the new regime, however, firms carrying out regulated cryptoasset activities will need FSMA authorization even if they are already MLR-registered. The FCA also warned that being registered under the MLRs does not guarantee authorization under FSMA. 

The agency will begin accepting applications for authorization under FSMA in September, and will encourage firms to focus on securing FSMA authorization rather than applying for MLR registration. 

Read the FCA consultation here