New Authorization for Crypto Companies by FCA

New Authorization for Crypto Companies by FCA

The Financial Conduct Authority (FCA) of the UK has set an application period for the authorization of crypto companies from September 30, 2026, to February 28, 2027. This new requirement is part of a change in the Financial Services and Markets Act, which brings the regulation of digital assets under the jurisdiction of the FCA. The new regime will take effect on October 25, 2027.

Who Needs Authorization

Documents for permission will have to be submitted by companies engaged in issuing regulated stablecoins (digital assets pegged to a stable currency), custody of cryptocurrencies, platform management, as well as those providing staking services (the process of earning new tokens for holding crypto-assets).

Even those companies already registered under AML (anti-money laundering) will need to obtain separate authorization. Importantly, firms that apply within the required period will be able to continue operations even if the authority doesn’t manage to review documents before the regime launch.

Transition Period and Risks

A transition period is planned for companies. Organizations without permission or those who miss the application deadline will be given limited time to fulfill already concluded contracts, but new agreements will be prohibited. The maximum market exit period is up to two years.

Stablecoins and DeFi

The FCA has eased capital requirements for stablecoin issuers following consultations. Now the key capital requirement is reduced from 2% to 1% of the volume of issued stablecoins. Separate recommendations on decentralized finance (DeFi) will be submitted for consultation, but companies without identifiable management will remain outside regulation.

Global Initiatives

The FCA is also interested in strengthening international collaboration. Previously, the New York State Department of Financial Services and the European Banking Authority signed a memorandum of understanding. This initiative aims at coordinating the oversight of stablecoins under MiCA (the EU’s regulatory approach to crypto-asset markets).

Conclusion:

Introducing stringent regulation in the UK could create more confidence for investors and consumers, increasing trust in crypto projects. At the same time, the authorization process and new investments might challenge many startups.

• Strengths: Ensuring legal clarity and investor protection.
• Risks: Costs related to implementing new requirements.
• Opportunities: Attracting institutional capital and international collaboration.
• Threats: Complicating work for new companies during adaptation.

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