• FCA unveils 2026 priorities, including digital asset rules and UK-issued stablecoins.
• UK government plans to bring all crypto firms under full financial regulation from October 2027.
• Experts welcome clarity but caution that over-regulation could stifle innovation.

The UK’s Financial Conduct Authority (FCA) has outlined its priorities for 2026, signaling a strong push to support growth, innovation, and technological adoption in the financial sector. In a letter to Prime Minister Keir Starmer, the FCA emphasized plans to finalize rules for digital assets, advance UK-issued stablecoins, and strengthen the country’s digital finance infrastructure.

The letter details the regulator’s pro-growth agenda, including initiatives to:

Sponsored

Sponsored

• Oversee digital asset markets and provide clear guidance for crypto firms.
• Enable asset managers to tokenize funds and adopt faster, more efficient payment systems.
• Streamline authorizations for new and scaling firms, improving access to capital and supporting competition in payments and investment markets.

“This endorsement of stablecoins and digital finance infrastructure reflects a broader transition toward a more accessible, real-time, and interoperable financial system,” said Will Beeson, co-founder of UK challenger bank Allica and former head of Standard Chartered’s digital asset platform. “Clear regulatory guidance will help UK firms compete globally and support real-world crypto use cases, especially for small and medium-sized businesses.”

The FCA’s 2026 plans also include overseeing the launch of variable recurring payments, supporting SME lending through open finance, and advancing the tokenization of funds. These measures are part of a wider strategy to maintain the UK’s position as a leading financial hub while keeping pace with rapid technological change.

UK Chancellor of the Exchequer Rachel Reeves and Treasury officials have welcomed the FCA’s approach, which aims to provide clarity for firms while fostering innovation and maintaining market integrity.

Building on the FCA’s 2026 initiatives, the UK government is preparing to bring all cryptocurrency firms under the existing financial regulatory framework from October 2027, with legislation expected to be introduced in Parliament shortly.

Sponsored

Sponsored

According to Reuters, the bill will largely follow draft legislation published in April, which outlines rules covering crypto exchanges, custody providers, and stablecoin issuers. A Treasury spokesperson confirmed that the legislation is intended to extend the UK’s current financial services rules to the crypto sector, rather than creating an entirely new regulatory regime.

If passed, the legislation would represent a major milestone for the UK’s digital asset industry, providing long-awaited regulatory clarity for both domestic and international firms.

UK Aligns With US-Style Regulatory Approach

By integrating crypto firms into its existing financial services framework, the UK is adopting an approach similar to the United States. This diverges from the European Union’s Markets in Crypto-Assets (MiCA) regime, which was designed specifically for the crypto industry and came into force earlier this year.

Under the proposed framework, crypto businesses will need to comply with standards already applied to traditional financial institutions, including governance, consumer protection, and market integrity rules.

Chancellor Rachel Reeves emphasized that the legislation aims to provide “clear rules of the road” for the industry while keeping “dodgy actors” out of the market.

Industry insiders have welcomed the clarity provided by both the FCA’s 2026 priorities and the upcoming 2027 legislation. However, experts warn that over-regulation could push innovative firms to other markets.

“These measures are positive steps to strengthen the UK’s position in global digital finance,” said Will Beeson. “But regulators must balance oversight with flexibility to avoid deterring growth in a fast-evolving market. Proportionality and pace will be key to ensuring firms can adapt without being forced into an ‘overnight upgrade.’”

Disclaimer