UK Watchdog Nears Crypto Rulebook Finish Line: Final Consultation Phase Begins

London's financial cops are sharpening their pencils. The UK's regulatory watchdog has entered the final consultation phase for its long-awaited crypto rulebook—a move signaling the end of the 'Wild West' era for digital assets in Britain.

The Rulemaking Sprint

Forget endless deliberation. This final phase suggests a sprint to the finish line. Regulators are now collecting last-minute industry feedback before locking in rules that will govern everything from exchange operations to stablecoin issuance. The message is clear: adapt or exit.

Clarity vs. Constraint

The impending framework promises regulatory clarity—the holy grail for institutional capital. But it also brings compliance costs that could squeeze smaller, innovative players. It's the classic finance sector playbook: write rules that favor the incumbents, then act surprised when innovation slows to a crawl.

The Global Domino Effect

Watch this space closely. The UK's rules won't exist in a vacuum. As a major financial hub, its regulatory stance creates a blueprint that other jurisdictions often follow—or deliberately oppose. The final consultation isn't just about British law; it's a positioning move in the global race for crypto supremacy.

One cynical finance jab? The same institutions that spent years dismissing crypto as a 'fraud' are now first in line to shape the rules that will govern it—ensuring they have the home-field advantage. The final consultation isn't an endgame. It's the starting pistol for crypto's next, more regulated—and arguably less rebellious—chapter.

FCA Says New Crypto Rules Aim to Build Trust Without Eliminating Risk

“These proposals continue our progress towards an open, sustainable and competitive crypto market that people can trust,” the regulator said.

At the same time, the FCA stressed that crypto investing will always carry risk, and regulation is intended to improve transparency and consumer understanding rather than eliminate volatility altogether.

The consultation package spans a wide range of market activity.

It includes proposed rules on business conduct standards, restrictions on using credit to purchase crypto, regulatory reporting requirements, asset safeguarding, and how retail collateral is treated when borrowing digital assets.

Stakeholders have until March 12 to submit feedback.

BREAKING: The UK Just Moved to Fully Integrate Crypto Firms Into the FCA Rulebook pic.twitter.com/mGBJ61hLLB

The proposals were first outlined in December, when the FCA signaled its intention to regulate crypto in a manner broadly consistent with conventional financial services.

Since then, the regulator says it has made “significant progress” in refining the framework as part of the government’s crypto roadmap.

Earlier this month, the FCA also published an indicative timeline for a new licensing regime covering crypto asset service providers.

Under the current plan, the application window for firms seeking authorization is expected to open in September 2026, though the regulator noted that details will be confirmed at a later date.

Once in force, the licensing regime WOULD impose tighter oversight on crypto businesses operating in the UK, requiring FCA approval and ongoing compliance with regulatory standards.

UK Weighs Ban on Crypto Donations

As reported, the UK government is considering a ban on cryptocurrency donations to political parties, a move that could directly affect Reform UK, which recently became the first party in the country to accept digital assets.

The proposal is under review as part of the upcoming Elections Bill, according to people familiar with internal discussions, though officials have yet to formally confirm the plan.

The debate follows Reform UK’s push to present itself as Britain’s most crypto-friendly party under the leadership of Nigel Farage.

Furthermore, the UK government has moved a step closer to overhauling how decentralized finance activity is taxed, backing a new framework that would spare users from triggering capital gains each time they deposit tokens into lending protocols or liquidity pools.