The UK’s Financial Conduct Authority (FCA) is preparing to formally regulate cryptocurrency businesses in 2026, according to a report from the Financial Times. The regulator has suggested that its structure will not be similar to the traditional financial regulations because digital assets are not similar to traditional markets. Rather, the FCA will forgo a number of requirements and increase a number of others with the aim of developing a system that would fit the divergent risks of crypto trading.
Lighter Rules for Crypto Firms by 2026
Banks and investment houses will be facing different standards under the draft scheme regarding crypto platforms. Senior management responsibility, operational controls and internal system requirements are some of the areas which are likely to be light. FCA claimed that crypto companies pose no systemic risk comparable to that posed by established financial institutions.
The regulator also intends to lift off cooling-off periods in the purchase of crypto. Such safeguards are usually necessary in traditional financial products, but the FCA thinks they would not provide any meaningful protection in the context of the dramatic volatility in the prices of digital assets.
Likewise, some of the commitments concerning outsourcing management will not be applicable in the blockchain-based solutions, where transactions can be frequently conducted without middlemen. This change is aimed at making firms more flexible and keeping the transparency levels in a regulated structure.
FCA Prioritizes Cybersecurity in New Crypto Rules
Some of the obligations will be lightened, whereas others will be tightened. Cybersecurity was pointed out by the FCA as one of its priorities, and it was emphasized that companies need to improve their infrastructure to resist attacks. New cases such as the $1.5 billion theft of Bybit wallet makeup the urgency of enhanced digital security.
In order to comply, businesses will have to exhibit resilience to breaches, continuity in operations and prevent prolonged service disruptions. Due to the continuous process of crypto trading, the regulator has focused on the fact that it is imperative to remain 24/7 available. The failure of businesses to deliver on these expectations may result in compliance problems when the new structure is established.
Together with the technical standards, the FCA is exploring the option of extending the consumer duty through crypto platforms. The rules would compel firms to treat customers fairly, offer value money, as well as give users options to resolve through the Financial Ombudsman Service in case they are introduced.
