The UK’s Financial Conduct Authority (FCA) has launched a public consultation as part of its push to introduce formal legislation for the cryptocurrency sector. The move marks a key step in transitioning the UK from a largely unregulated environment to a more structured crypto oversight regime.
In a newly released discussion paper, the FCA is calling for industry and public feedback on a range of crypto-related activities. These include the role of intermediaries, the mechanisms behind staking, lending, and borrowing of crypto assets, and the evolving space of decentralized finance (DeFi). The regulator aims to develop a balanced framework that ensures investor protection while supporting innovation.
The FCA emphasized that this early consultation aligns with broader efforts by the UK Treasury, which published a draft framework earlier this week. Once legislative approval is secured, the FCA will formally gain authority over specific crypto activities, tightening oversight across the digital asset space.
This outreach comes at a time when global regulators are intensifying efforts to bring clarity and stability to crypto markets. The FCA believes that establishing clear rules will build trust and fuel responsible growth in the UK’s digital economy.
“Crypto is a growing industry. Currently largely unregulated, we want to create a crypto regime that gives firms the clarity they need to safely innovate, while delivering appropriate levels of market integrity and consumer protection,” said David Geale, executive director of payments and digital finance at the FCA.
“Our aim is to drive sustainable, long-term growth of crypto in the UK,” he added.
FCA Outlines Five-Year Strategy for Crypto Oversight
The FCA’s newly launched consultation is just one part of a wider roadmap to regulate digital assets across the UK. Alongside today’s discussion on staking, lending, and DeFi, the regulatory agenda also includes forthcoming proposals around stablecoin regulation, market abuse controls, custodial safeguards, and disclosure requirements for crypto exchanges.
This broader crypto strategy is a key pillar of the FCA’s 2025–2030 five-year plan, which emphasizes “smarter regulation” to foster sustainable economic growth. The agency also aims to enhance consumer protection, improve financial literacy, and reduce exposure to financial crime in the digital asset ecosystem.
Stakeholders and the public have until June 13, 2025, to submit feedback. After analyzing submissions, the FCA plans to issue a more formal consultation later this year, paving the way for the implementation of a full regulatory framework for crypto operations.
Legal experts have welcomed the FCA’s approach. Hannah Meakin, a partner at Norton Rose Fulbright, praised the regulator’s nuanced consideration of risks and opportunities:
“The discussion about potential requirements for cryptoasset exchanges demonstrates some creativity and sophistication of thinking about how to balance the multiple objectives of user, industry and regulator,” she said.
“The branch and subsidiary combination idea is of particular interest.”
Ultimately, while the FCA’s intent to foster innovation while imposing oversight is commendable, industry observers say the success of the regime will hinge on how effectively the final rules are crafted and applied.
Quick Facts
- The FCA seeks public feedback on proposed crypto regulations, focusing on trading platforms, intermediaries, staking, lending, borrowing, and DeFi.
- A ban on using borrowed funds, including credit cards, for purchasing cryptocurrencies is under consideration.
- The consultation period ends on June 13, 2025, with final regulations to follow.
- The UK aims to balance innovation with protection, aligning with U.S. practices.
