- The FCA is planning a more detailed and expanded regulatory system for cryptocurrency firms, which would require a tougher compliance beyond the anti-money laundering rules
- Companies like Coinbase, Gemini, and Bitpanda will have to meet higher standards under the new “gateway regime” instead of just registering.
- Despite the regulatory changes, the rate of crypto ownership is increasing, but many still misunderstand their rights regarding financial protection from the FCA.
The UK is preparing for a more strict crypto rule, giving the industry about a year to adjust, according to a senior financial regulator.
On Tuesday, the country’s financial watchdog listed out its plan to introduce a more thorough and expanded regulatory system for cryptocurrency by 2026. The goal of this plan is to establish tougher guidelines, to oversee crypto related activities going on in the country.
The FCA, which is the UK’s financial regulator, is responsible for all matters related to the banks and other investment products, ensuring markets work fairly and protecting consumers from fraud.
New FCA Authorization Rules for Crypto Companies
The UK’s Financial Conduct Authority (FCA) has shared its plans for a new approval system for crypto firms, set to launch in 2026. Matthew Long, the regulator’s director of payments and digital assets, explained that the upcoming “gateway regime” will introduce a more strict requirement for cryptocurrency related activities beyond the current anti-money laundering rules.
He added that crypto companies like Coinbase, Gemini, and Bitpanda, other than just registering, would need to meet higher standards to be able to offer a wider range of services. Long also added that a bunch of consultations, rule-making, and legislative processes must be completed before the system is implemented.
The FCA plans to introduce a more robust crypto regulatory plan by 2026, with new policy papers on stablecoins, trading platforms, staking, and more expected this year. Since 2020, when the anti-money laundering registration launched, it has received 368 applications, but only 50 firms, or 14%, have been approved. Many crypto businesses may need to reapply under the upcoming rules.
So far, it can be said that crypto adoption is continually growing, with the average in which an individual can hold increasing. However, a lot of misunderstandings are still held, as some believe they can seek compensation from the regulator if any issues arise.
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