New UK Rules Signal Resolve to Build Cryptoasset Hub

The UK is seeking to become a global cryptocurrency hub, but Isadora Arredondo, Hedera’s vice president of global policy, said Brexit, COVID-19 and investment fund failures shifted regulators’ focus toward consumer protection. Arredondo, who worked at the Financial Conduct Authority (FCA) from 2018 to 2021, said this created a two-track divide: greater support for institutional wholesale businesses and rigorous scrutiny of retail startups.

Arredondo said on June 24, 2026, that the UK applies existing financial regulations when reviewing crypto firms, with the new regime expected to take effect in October 2027. The Bank of England, meanwhile, has adopted temporary issuance guardrails, setting a £40 billion cap, or about $50.6 billion, on each systemic stablecoin’s circulation. She also called for interoperability standards spanning blockchain, stablecoins and central bank digital currencies.

The UK government unveiled plans in April 2022 to make the country a global cryptoasset technology hub. But overlapping responsibilities among HM Treasury, the Bank of England and the Financial Conduct Authority have made it difficult to harmonize rules for stablecoins, the digital pound and tokenized deposits, leaving the UK’s regulatory progress behind the United States and European Union.

On May 20, 2026, the FCA said it had opened a market-testing program and pre-application support service, but the full crypto regulatory regime is not expected to take effect until October 2027. Industry participants say the lack of clarity could cost the UK companies such as Deribit. After Coinbase acquired Deribit for $2.9 billion, the potential loss in tax revenue was estimated at hundreds of millions of dollars.

Stablecoins are digital assets pegged to fiat currencies, and Circle-issued USDC is one of the company’s main products. The European Union has established rules through MiCA, while the United States has advanced regulation through the GENIUS Act. How Britain aligns itself with the two major markets will help determine whether London can retain its position as a fintech and cross-border payments hub.

Circle policy chief Dante Disparte recently told a UK House of Lords committee that Britain should combine MiCA’s regulatory clarity with the institutional strengths of the GENIUS Act to develop its own crypto and stablecoin rules. He warned that continued regulatory inaction would drive related businesses and capital overseas, weakening London’s global competitiveness.

Britain is moving cryptoassets into a full Financial Conduct Authority authorization regime, expanding oversight beyond anti-money laundering registration and financial promotions rules. The framework covers issuing qualifying stablecoins, operating cryptoasset trading platforms, dealing and arranging transactions, safeguarding cryptoassets and arranging staking. Its territorial reach also captures overseas firms dealing with, arranging or safeguarding assets for UK retail consumers, making authorization a market-access requirement for global operators seeking direct access to those clients.

The FCA issued final perimeter guidance on Sept. 16, 2026, two weeks before applications open on Sept. 30. Firms seeking statutory transitional protection must apply by Feb. 28, 2027, ahead of the regime taking effect on Oct. 25, 2027. Existing registrations and permissions will not transfer automatically. Companies that miss the deadline may still apply, but will lose the saving provisions that permit continued operations while applications are assessed and could be unable to onboard new customers once the regime begins.