On 21 April 2026, HM Treasury published a draft statutory instrument (SI) and accompanying policy note proposing amendments to the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026. The draft SI is at the consultation stage; Treasury is inviting written responses from industry participants until close of business on 22 May 2026. No provisions are yet in force.
The controlling authority is the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, made in February 2026. The Crypto Regime established regulated activities for cryptoassets including dealing as principal, dealing as agent, arranging deals in qualifying cryptoassets, and safeguarding qualifying cryptoassets, and requires firms carrying on those activities to obtain FCA authorisation before October 2027, when the regime enters full force. The draft SI amends Regulation 9M (issuing qualifying stablecoin) and the dealing and arranging regulated activities to carve UK-issued qualifying stablecoin (UKQS) out of the cryptoasset dealing and arranging perimeter, while preserving FCA oversight through the safeguarding activity under Regulation 9N.
The practical effect for market participants divides into three areas. First, stablecoin payments firms intending to use UKQS in payment services will not need to obtain FCA authorisation for cryptoasset dealing or arranging before the planned payments services reforms come into effect, though they must still secure permissions for cryptoasset safeguarding where they hold UKQS on behalf of clients. Second, firms engaged in proprietary trading and market making on UK platforms gain a targeted carve-out from the dealing-as-principal activity, removing a competitive asymmetry that had threatened to push UK-based liquidity providers offshore. Third, central securities depositories (CSDs) and their nominee companies benefit from an extension of existing exemptions to cover cryptoasset safeguarding for specified investment cryptoassets, addressing an oversight in the original regime.
UKQS lending and borrowing activities remain inside the dealing perimeter so the FCA can adopt rules addressing consumer risks. Firms undertaking UKQS payment services that rely on the temporary settlement exclusion from cryptoasset safeguarding should note that the draft SI clarifies that exclusion applies only where the activity is ancillary to dealing or arranging. The government also proposes to align the financial promotions regime with the revised regulated activities and to bring forward early activation of provisions disapplying collective investment scheme and alternative investment fund characterisation of stablecoin backing assets. Treasury will consult more broadly on stablecoin payment services as part of forthcoming payments services reforms, planned for Q2 2026.
Our firm advises on cryptoasset regulatory authorisation, stablecoin compliance, and the structuring of token-based payment services across multiple jurisdictions. We maintain a dedicated partner network with hands-on experience in FCA authorisation processes, payments regulation, and crypto-related financial promotions. Firms seeking guidance on the impact of these proposals, or wishing to prepare consultation responses, are welcome to contact us. Areas we regularly cover include: cryptoasset dealing and safeguarding licences, stablecoin issuance and payment authorisation, financial promotions compliance for digital assets, and CSD regulatory structuring.
Source: HM Treasury, Draft statutory instrument amending the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026: Policy Note, Policy paper, published 21 April 2026. Available at: https://www.gov.uk/government/publications/policy-note-draft-statutory-instrument-amending-the-cryptoasset-regulations. Confirmed 28 April 2026.
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