The UK Financial Conduct Authority has launched a series of consultations on proposed rules for digital asset markets, signaling a further step toward a comprehensive regulatory regime for crypto activities. The proposals span three consultation papers and cover crypto exchanges, intermediaries, staking, lending and borrowing, market abuse, disclosures, and decentralized finance. Industry feedback will be accepted through February 12, 2026.
The FCA said the proposals are designed to balance consumer protection with innovation, emphasizing transparency and responsible conduct rather than eliminating risk. Officials stressed that clearer standards are intended to help market participants and consumers better understand the risks associated with crypto assets. The consultations build on earlier measures focused on financial promotions and anti-money laundering compliance.
From Promotions to Market Structure
The latest proposals move the UK closer to establishing full market structure rules for crypto, aligning oversight more closely with traditional financial markets. Under the framework, crypto trading platforms would face clearer requirements around asset admissions, disclosures, and trading integrity. Measures addressing insider dealing and market manipulation would also be introduced to improve market confidence.
Staking services are a central focus, with the FCA seeking views on how firms should communicate risks associated with yield-bearing products that lock up customer assets. Crypto lending and borrowing are also included, with proposed safeguards aimed at protecting both borrowers and lenders in volatile market conditions. The regulator is assessing how these activities compare to regulated financial products without presuming identical treatment.
Decentralized finance presents a more complex challenge. The FCA is consulting on whether DeFi activities, such as trading, lending, and borrowing, conducted without intermediaries should fall under similar regulatory expectations as centralized services. The approach reflects growing institutional interest in DeFi alongside concerns about governance, accountability, and consumer exposure.
Policy Alignment and Market Implications
The consultations follow the UK government’s announcement that it plans to introduce legislation extending existing financial services laws to crypto assets by 2027. Under those plans, crypto firms would be brought formally within the FCA’s regulatory perimeter, providing a statutory foundation for the rules now under discussion.
For market participants, the proposals suggest a gradual shift toward clearer obligations and supervisory expectations. Institutional firms may view the process as a step toward regulatory certainty, while smaller crypto businesses could face higher compliance costs. The FCA cautioned that, despite the consultations, most crypto activities remain largely unregulated for now, underscoring the transitional nature of the current framework.
