The Financial Conduct Authority (FCA) has launched a new consultation to define the regulatory perimeter for cryptoassets, clarifying which entities and activities will fall within UK regulation. The consultation, open until 3 June 2026, covers key areas including stablecoin issuance, operation of trading platforms, dealing and arranging transactions, custody, and staking. This forms part of the UK’s broader crypto framework, which is scheduled to take effect in October 2027, with licensing applications opening on 30 September 2026. In preparation, the FCA has already begun engaging market participants through its pre-application support service.

A central focus of the consultation is determining when cryptoasset activities are considered to take place in the UK, particularly for offshore providers. The FCA proposes that where services involve UK consumers, they will often be deemed UK-based, even if delivered from abroad, limiting reliance on traditional exemptions for overseas firms. However, the position becomes more nuanced when intermediaries are involved. Offshore providers may avoid direct licensing requirements if a properly authorized UK intermediary stands between them and the end consumer, although this depends on the scope of the intermediary’s permissions and the structure of the transaction chain.

The consultation also provides specific guidance on custody and stablecoins. For custody, regulatory scope depends on where control mechanisms are located rather than the client’s location, meaning offshore custodians may still fall within UK regulation in certain scenarios. For stablecoins, issuance activities conducted from the UK - such as offering, redemption, and maintaining value - require authorization. Even where these functions are outsourced, the originating entity may still be treated as the issuer and subject to regulation. The framework highlights the FCA’s intent to assert jurisdiction broadly while accommodating complex cross-border structures within a clearly defined compliance regime.