The U.K. crypto sector is gearing up for a significant overhaul as regulatory authorities prepare to implement a new authorization framework by 2026. A senior official from the Financial Conduct Authority (FCA) has outlined the upcoming changes that will reshape the landscape for crypto firms operating in the country.
The Impending Gateway Regime
In a recent interview with CoinDesk, Matthew Long, Director of Payments and Digital Assets at the FCA, discussed the details surrounding the forthcoming “gateway regime.” This initiative will usher in a new authorization process specifically designed for cryptocurrency companies.
“We will establish a gateway to facilitate authorization, but we need to conduct consultations, draft regulations, and finalize the legislative framework to make this a reality,” Long explained. This transition marks a significant shift from the existing anti-money laundering (AML) framework, under which firms such as Coinbase, Gemini, and Bitpanda have traditionally operated.
From AML Compliance to Comprehensive Authorization
Under the current system, firms merely need to register to comply with AML regulations. However, the new authorization regime will require these companies to undergo a more rigorous approval process with the FCA. The anticipated framework will encompass a broader range of offerings and services.
This year, the FCA is expected to release comprehensive documents addressing various aspects of the crypto sector, including stablecoins, trading platforms, and staking. Long confirmed that the new regime will officially commence following the publication of final policy papers in 2026.
A Challenging Path to Approval
Since the FCA launched its AML registration in 2020, it has received a total of 368 applications from firms seeking compliance. However, only 50 of these applications, representing just 14%, have been approved. As a result, many companies may need to restart their approval process under the new regime.
Defining Regulated Activities
The new legislation will clarify what constitutes a regulated activity within the crypto sphere. According to Long, any company engaging in these activities will be required to seek formal authorization.
Recent U.K. government documents indicated that regulated activities are likely to include the issuance of both crypto and fiat-referenced stablecoins, as well as payment, exchange, and lending services. Notably, stablecoins will no longer be classified under the U.K. payments regulations, as previously planned, and the FCA intends to consult on draft rules for stablecoins early this year.
Long emphasized the unique nature of stablecoins, stating, “We’re ensuring that we integrate the best practices from existing regulations in traditional finance, while also adapting to the distinct characteristics of stablecoins.”
Navigating the Transition
The FCA is currently determining the authorization process for crypto companies. Long noted that it remains unclear what steps firms already registered under the AML regime will need to take to transition to the new framework. However, he indicated that the new regime would offer broader permissions, suggesting that companies seeking additional permissions will need to apply accordingly.
As a result, firms may face a prolonged registration process, even if they have previously secured a license. “We will keep communication open with firms about what the gateway will entail before it launches, and we aim to implement it as soon as possible,” Long assured.
Looking to Europe for Best Practices
In developing its regulatory approach, the FCA plans to draw insights from Europe’s bespoke legislation for the crypto industry, as well as the recommendations from the International Organization of Securities Commissions (IOSCO). An individual familiar with the matter noted that IOSCO will soon publish a report on how different countries are progressing in alignment with its standards.
Long concluded by stating, “Our focus is on understanding and identifying best practices to ensure a robust regulatory framework.”
As the U.K. prepares for this significant regulatory overhaul, the crypto industry must brace for a transformative period that will require adaptability and compliance with new standards.
