On November 26, 2025, David Geale, executive director of Payments and Digital Finance and Payment Systems Regulator (PSR) managing director, outlined the Financial Conduct Authority’s (FCA) approach to regulating cryptoassets and stablecoins in a speech delivered at City & Financial Global. Geale detailed a philosophy focused on creating a trusted, competitive, and innovative UK market, noting that over 90% of the UK population has heard of crypto, with roughly seven million individuals currently owning or having owned it, averaging £1,800 invested. The FCA aims to establish a balanced and proportionate regulatory regime as the government seeks to integrate crypto into the existing financial perimeter.
FCA Philosophy and Approach to Crypto Regulation
The FCA aims to create a UK cryptoasset and stablecoin market that balances innovation with integrity and trust. They are working to build a “proportionate, sustainable regime” for firms, fostering an environment where businesses want to operate and consumers can make informed decisions. The FCA emphasizes being “open for business” and actively seeks industry feedback, stating they want regulation to facilitate growth, not stifle it. This approach is intended to position the UK competitively within the evolving digital finance landscape.
The FCA is proactively utilizing initiatives like the Regulatory Sandbox to support crypto innovation, particularly with stablecoins. A stablecoin-specific cohort is launching, allowing firms to test UK-issued stablecoins and provide the FCA with valuable data. This agile approach enables the FCA to test policy proposals and refine regulations based on real-world application. They are also hosting stablecoin policy sprints in March to explore use cases and determine appropriate regulatory needs, encouraging collaboration between traditional finance and fintech firms.
Recognizing the unique nature of the crypto market, the FCA acknowledges that a simple “lift and shift” of existing regulations won’t be effective. They are aware of challenges like compliance difficulties with decentralized assets, legal uncertainties surrounding ownership, and risks associated with overseas platforms. The FCA is therefore taking a deliberate and iterative approach, prioritizing industry engagement and focusing on adapting regulations to address the specific complexities of cryptoassets and stablecoins.
Current State of the UK Cryptoasset Market
Currently, over 90% of people in the UK have heard of cryptoassets, with roughly seven million owning or having owned them, averaging just over £1,800 invested. Despite this growing awareness, the UK cryptoasset market remains largely unregulated and carries inherent risks, including high volatility and security concerns. The FCA recognizes this duality – the potential for growth alongside consumer protection needs – and is working to establish a balanced regulatory regime to foster innovation while mitigating harm.
The FCA is actively preparing for the regulation of cryptoassets, prioritizing engagement with industry and feedback to ensure a proportionate and sustainable framework. Substantial consultations have already been published on stablecoin issuance, cryptoasset custody, and prudential requirements, with further papers planned for early next year addressing market abuse and consumer duty. This proactive approach aims to create a competitive environment that attracts firms and facilitates growth within the UK’s financial services market.
To further support innovation, the FCA is launching a stablecoin-specific cohort within its Regulatory Sandbox. This allows firms to test UK-issued stablecoins under the evolving regulatory regime, providing valuable feedback to the FCA and potentially driving new ideas. Applications open today and run until January 25th, and the first firm has already been accepted to test a GBP stablecoin for payments – demonstrating the FCA’s commitment to fostering growth and agile policymaking.
Prioritizing Innovation Through Regulatory Sandboxes
The FCA is actively prioritizing innovation in the cryptoasset space through its Regulatory Sandbox. A stablecoin-specific cohort has been launched to support firms testing UK-issued stablecoins, allowing the FCA to test policy proposals in an agile fashion. Applications for this cohort are open until January 25th, with one major firm already accepted to test a GBP stablecoin for payments – demonstrating commitment to helping firms grow within the UK market.
To further support innovation and policy development, the FCA will host in-person stablecoin policy sprints in March. These sprints aim to explore retail and wholesale use cases for stablecoins, determining where regulation is necessary. Participants from traditional finance, payment, and fintech firms will collaborate to improve trust, speed, cost, and interoperability—expressions of interest will open in January.
The FCA recognizes the unique nature of the cryptoasset market and is moving away from simply applying traditional regulations. They acknowledge complexities like decentralized assets and legal uncertainties regarding ownership, alongside risks associated with overseas platforms. This approach includes supporting RegTech platforms like Eunice, which joined the Regulatory Sandbox to explore disclosure templates for cryptoasset investors and boost transparency.
Upcoming Regulatory Consultations and Policy Sprints
The FCA is actively seeking industry engagement through upcoming regulatory consultations and policy initiatives. A stablecoin-specific cohort is launching within the Regulatory Sandbox, accepting applications until January 25th. This allows firms to test UK-issued stablecoins and provide feedback on policy proposals. The FCA emphasizes a desire for practical input, stating they want to facilitate growth, not stifle it, and will consider alternative solutions proposed by firms.
In March, the FCA will host in-person stablecoin policy sprints to further examine retail and wholesale use cases. These sprints aim to determine where regulation is—or isn’t—needed, bringing together participants from traditional finance, payment, and fintech firms. The goal is to explore how stablecoins can improve trust, speed, cost, and interoperability across various applications, actively shaping future policy.
The FCA acknowledges the unique nature of the cryptoasset market and is moving away from simply applying traditional financial regulations. Recognizing challenges like decentralization and overseas platforms, the agency is prioritizing agile policymaking. Further consultations are expected early next year, focusing on consumer duty, regulatory reporting, and more, after considering feedback from previously published discussion papers on stablecoin issuance and cryptoasset custody.
We want to bring together participants from traditional finance and payment and fintech firms to explore how stablecoins can improve trust, speed, cost and interoperability across different use cases.
Challenges in Applying Traditional Financial Rules
The FCA recognizes that applying traditional financial rules directly to the cryptoasset market presents significant challenges. A “lift and shift” approach won’t work due to the complexities involved, particularly with decentralized cryptoassets which complicate compliance with disclosure and due diligence requirements. Legal uncertainty surrounding ownership and location further complicates matters, especially as most UK consumers utilize overseas platforms, increasing the risk of harm from potential insolvency.
The FCA is proactively adapting its regulatory approach through initiatives like the Regulatory Sandbox. A stablecoin-specific cohort, launching with one major firm already accepted, will test UK-issued stablecoins and inform policy development. Applications open until January 25th. Additionally, in-person stablecoin policy sprints will be held in March, bringing together firms from both traditional finance and fintech to explore use cases and refine regulatory needs.
Recognizing the unique nature of the crypto market, the FCA is prioritizing agile policymaking and industry feedback. They are actively seeking input from firms on proposed regulations, encouraging them to propose solutions if current proposals won’t facilitate growth. This collaborative approach, combined with initiatives like the Regulatory Sandbox, aims to create a proportionate and sustainable regime that fosters innovation while protecting consumers.
One that is competitive, built for the future and ready for firms – and that allows consumers to make informed decisions and understand both what they are getting into and the limits of consumer protection.
FCA Supervision of Cryptoasset Businesses
The FCA is actively preparing for the regulation of cryptoassets and stablecoins, aiming for a market that balances innovation with integrity and consumer trust. They are currently developing a regulatory regime, having already published consultations on stablecoin issuance, cryptoasset custody, and prudential requirements. Further consultations are expected by early next year, covering areas like consumer duty and regulatory reporting, with policy statements and a firm “gateway” to follow. The FCA emphasizes openness to industry feedback, encouraging firms to propose solutions and contribute to the process.
To foster innovation, the FCA is utilizing its Regulatory Sandbox. A stablecoin-specific cohort launched today, accepting applications until January 25th, will allow firms to test UK-issued stablecoins under the evolving regulatory framework. A major firm has already been accepted for testing a GBP stablecoin for payments. The FCA also announced policy sprints in March to further explore stablecoin use cases, bringing together participants from both traditional finance and fintech sectors.
Currently, the FCA supervises cryptoasset businesses for anti-money laundering, counter-terrorist financing, and financial promotions. Recognizing the unique challenges of this market, the FCA acknowledges that a direct application of traditional rules won’t work. They are prioritizing an approach that considers the complexities of decentralised assets, legal uncertainties, and risks associated with overseas platforms, while striving for the principle of “same risk, same regulation”.
