The U.K.’s crypto industry has just over 12 months to prepare for an even stricter regulatory regime, a senior official with the country’s finance regulator said.
Matthew Long, director of payments and digital assets at the U.K.’s Financial Conduct Authority (FCA), told CoinDesk in an interview that the “impending gateway regime” earmarked for 2026 will introduce a new authorization process for crypto companies.
“We will have a gateway which will allow authorization. But obviously we’ve got to go through those consultations, create those rules and get the legislation for that to take place,” Long stated.
This new regime marks a significant shift from the current anti-money laundering (AML) framework. Companies such as Coinbase, Gemini, and Bitpanda will transition from a simple registration process to an authorization regime that will encompass a broader range of activities, necessitating a fresh approval process from the FCA.
The FCA plans to release papers this year that will cover various aspects including stablecoins, trading platforms, staking, and prudential crypto exposure. The regime is expected to be operational following the publication of final policy papers in 2026, according to Long.
Since the introduction of its AML register in 2020, the FCA has received 368 applications from firms wishing to comply with the regulations, but only 50 firms—representing just 14% of applicants—have successfully obtained approval. This means many companies may find themselves starting anew under the new regime.
Defining Regulated Activities
Upcoming legislation will establish a clear definition of what constitutes a regulated activity, as asserted by FCA’s Long. Companies engaged in these activities will be required to seek authorization.
In 2023, the former U.K. government indicated that regulated activities would likely encompass crypto and fiat-referenced stablecoin issuance, along with payment, exchange, and lending activities.
Importantly, stablecoins will not fall under the U.K. payments regulations previously established. Former Economic Secretary Tulip Siddiq confirmed this in November, adding that the FCA plans to consult on draft rules for stablecoins early this year.
Long emphasized, “What we’re doing in terms of the stablecoins is ensuring we take the best from the existing regulations in traditional finance (TradFi), acknowledging that stablecoins are unique and require tailored regulations.”
Transitioning to the New Regime
The FCA is still determining the authorization process for crypto companies, as Long revealed that the specifics are yet to be finalized.
There remains uncertainty regarding what steps companies already registered under the AML regime will need to undertake, but Long indicated that the new regime will come with broader permissions. Companies may need to reapply for these permissions.
This suggests that firms may have to undergo a comprehensive registration process, even if they already hold existing licenses.
“We’ll be communicating with firms about what the gateway will look like before it goes live. Our intention is to launch it as soon as feasible,” Long remarked in reference to the new authorization regime.
In its approach, the FCA is also looking to Europe, where bespoke legislation for the crypto sector has been launched. Observing these developments aligns with the International Organization of Securities Commissions’ (IOSCO) 18 recommendations. IOSCO is set to publish an update on countries’ progress in implementing its standards.
Long concluded, “It’s a case of understanding and looking for best practices.” In summary, as the U.K. gears up for its new regulatory landscape, firms must brace themselves for the significant changes ahead while the FCA works diligently to establish a clear and effective framework.
