UK's bold new crypto rules promise to unlock global trading, but huge compliance hurdles still threaten the rollout

Policy UK's bold new crypto rules promise to unlock global trading, but huge compliance hurdles still threaten the rollout The U.K. FCA's crypto framework has been praised for prioritizing global liquidity and institutional adoption, but the authorization process is expected to be daunting. By Jamie Crawley , AI Boost | Edited by Aoyon Ashraf Jul 4, 2026, 12:00 p.m. 3 min read Make preferred on Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Make preferred on London, U.K. (Cj / Unsplash+) Summary Show Industry participants say the FCA's approach to preserving global liquidity and overseas-issued stablecoins shows promise. Uncertainty over international crypto firms and DeFi, coupled with a demanding authorization process, however, could prove a deterrent. Institutional adoption could however be given the required boost through the legal certainty that the framework provides. The U.K.'s Financial Conduct Authority (FCA) unveiled its cryptocurrency regulatory framework this week , winning early praise for taking an internationally connected approach, but industry participants said significant questions remain before Britain can establish itself as a global crypto hub. The FCA's package of rules creates a framework that preserves access to global liquidity through overseas trading venues and allows non-U.K.-issued stablecoins to circulate, various industry participants have highlighted. "The publication of the FCA's final crypto rules is a major milestone for regulatory clarity and a strong outcome for the U.K.'s competitiveness in digital asset innovation," Katie Harries, Coinbase's head of policy for Europe, said in a Telegram message. Also, FCA's new measures around global liquidity and non-domestic stablecoins contrast with what many industry participants view as the more protectionist approach set out by the European Union's (EU) Markets in Crypto-Assets (MiCA) regulation, which effectively encouraged firms to ring-fence European operations and liquidity. Particularly, FCA's new Qualifying Cryptoasset Trading Platform (QCATP) model should allow overseas exchanges to serve U.K. customers through locally authorized branches connected to existing global trading infrastructure, according to Christopher Collins, a financial markets and regulation partner at Katten Muchin Rosenman. "The benefit of such an approach is allowing access for U.K. customers to established global liquidity in the offshore trading platform, rather than having a ring-fenced U.K. liquidity pool, which should mean better pricing and outcomes for U.K. customers," Collins said in an emailed comment. However, Collins warned that the framework currently leaves one critical question unanswered. The FCA has said overseas branches will only be authorized where their home jurisdiction provides "comparable levels of regulatory protection." But it has yet to specify which jurisdictions meet that standard. "That isn't enough clarity for firms to build a business model," Collins said, arguing that firms need greater certainty before investing in U.K. operations. Harries also highlighted DeFi as an unresolved issue, warning that earlier proposals would effectively prevent centralized platforms from offering access to decentralized finance applications. "The U.K.'s future approach to DeFi will be critical," she said, arguing such restrictions would leave it out of step with jurisdictions such as the U.S., where policymakers are exploring DeFi as part of broader tokenization strategies . Regulatory hurdles Beyond policy questions, firms face a formidable authorization process. Thomas Cattee, a partner at Gherson Solicitors, warned there is "a very high risk of failure" for firms seeking authorization under the new Financial Services and Markets Act regime. "The existing AML registration process with the FCA, which is much narrower, is already incredibly demanding, with the FCA rejecting or forcing the withdrawal of over 85% of applications," he said in an emailed comment. The new framework introduces substantially broader requirements covering Consumer Duty, prudential standards, operational resilience and senior management accountability. Cattee also cautioned firms against delaying applications, pointing to MiCA's rollout in Europe, where many firms waited until deadlines approached, creating licensing bottlenecks that left some businesses without authorization in time. For institutional investors, however, the new framework represents more significant than just another crypto rulebook. Sandy Jones, director of digital assets at Baillie Gifford, said regulation does not automatically make crypto safer but provides the legal certainty and standards of governance needed for traditional financial (TradFi) institutions to adopt blockchain-based infrastructure. "The underlying technology is powerful, but it does not create a direct path into mainstream financial markets on its own," Jones said. "You need legal clarity, operational resilience, proper governance and rules that investors and institutions can recognise." Jones also welcomed the FCA's recent refinements to its stablecoin regime, arguing they create robust settlement infrastructure without imposing unnecessary operational friction. The industry's responses suggest the FCA has deliberately positioned the U.K. as a commercially pragmatic alternative to Europe's MiCA regime. But whether that translates into firms choosing Britain over other jurisdictions will depend less on the framework's ambition than on how predictably it is implemented over the coming months. The challenge is ensuring the authorization process and remaining policy gaps do not blunt the potential competitive advantages before they have a chance to take hold. UK AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards . For more information, see CoinDesk's full AI Policy . 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