The cryptographic industry of the United Kingdom has just over 12 months to prepare for an even more strict regulatory regime, said a senior official of the country’s finance regulator.
Matthew Long, director of Payments and Digital Assets of the United Kingdom Financial Authority (FCA), told Coindesk in an interview that the “imminent entry regime” that is intended for 2026 will be in fact a new authorization regime for cryptographic companies.
“We will have an entrance door that will allow authorization. But obviously we have to review those consultations, create those rules and obtain the legislation to take place,” Long said.
This regime will be a jump from the current anti-launch of money (AML). Signatures such as Crypto Exchanges Coinbase, Gemini and Bitpanda will move away from the need to register with the country to comply with the rules against money laundering to an authorization regime with rules for a set of offers. This will require that they go through a new process to obtain the approval of the FCA.
The FCA intends to publish documents in Stablecoins, commercial platforms, rethinking, exposure to prudential cryptography and more this year. The regime is expected to be launched after the final policy documents will be published in 2026, Long said.
Since its registration against money laundering for companies inaugurated in 2020, the FCA received 368 applications from companies that wish to comply, but only 50 companies, 14% of applicants have been approved so far. It is possible that many companies have to start over.
Read more: the United Kingdom financial regulator points to the encryption regime for 2026
Regulated activities
The next legislation will define what counts as a regulated activity, said FCA long. Companies that participate in these activities must seek authorization.
In 2023, the former United Kingdom government published documents that say that regulated activities would probably include the issuance of establishments with cryptocurrencies and referenced by Fiat, as well as payment, exchange and loan activities.
Stablecoins will no longer be taken under the regulations of payments in the United Kingdom as established in previous works, said former economic secretary Tulip Siddiq in November. The FCA plans to consult the Rules Project for Stablecoins earlier this year.
“What we are doing in terms of Stablecoins is to make sure that we take the best of the current regulation that exists in tradfi, but Stablecoins are ultimately unique,” Long said. “There is nothing exactly the same. We have to adapt the regulation we currently have.”
Read more: United Kingdom to write a regulatory framework for Crypto, Stablecoins at the beginning of next year
Transition
The FCA is still deciding on the process that cryptographic companies must pass to authorize, Long said.
Long added that it was undecided what steps that are already registered in the money laundering regime must take, but the new regime will come with broader permits, “so we would expect that if I wanted the additional permits, I would request them.”
Therefore, companies may need to go through a long registration process, even if they have already secured an existing license.
“We will communicate with the companies on how the gateway will look before it comes out live, our intention is to put it live as soon as it is humanly possible,” Long said referring to the authorization regime.
By formulating how it intends to move forward, the regulator also plans to look at Europe that has launched customary legislation for the cryptographic sector and the 18 recommendations of the International Securities Commissions. Iosco will soon publish a piece on how countries are progressing with their standards, said someone familiar with the matter.
“It is a case of understanding and search for best practices,” Long said.
Read more: cryptographic companies and the United Kingdom regulator are blamed by the industry exodus
