UK FCA Seeks Feedback on Crypto Standards Ahead of 2026 Legislation Rollout

Core Viewpoint - The UK's Financial Conduct Authority (FCA) is initiating a consultation to establish minimum standards for cryptocurrency firms to enhance oversight in a sector that has been challenging to regulate [1][2] Group 1: Regulatory Measures - The proposed measures aim to promote sound business practices similar to those required of traditional financial firms, including operational resilience and systems to combat financial crime [1] - The FCA's consultation is part of a broader effort to improve the competitiveness of the UK crypto sector while tightening oversight, as London has lost its position as a crypto hub to places like Dubai and Singapore [2][3] Group 2: Scope of Regulation - The consultation follows a draft Statutory Instrument from the Treasury that aims to bring crypto activities under the Financial Services and Markets Act, expanding the FCA's authority to include stablecoin issuance and custody of cryptoassets [3] - Proposed regulations will include lighter requirements for senior managers and technology outsourcing, reflecting the smaller systemic footprint of crypto firms compared to banks, while imposing stricter standards for unique risks such as cyber attacks [4] Group 3: Industry Criticism - The UK's regulatory approach has faced criticism for being disjointed and overly restrictive, with specific proposals like the Bank of England's stablecoin ownership cap being labeled as unnecessary by industry players such as Coinbase [5]