UK crypto rules aim to open global trading access as compliance burdens test rollout

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Highlights

UK Financial Conduct Authority's new crypto framework favors global market access by permitting UK clients access to overseas trading venues and stablecoins, unlike the EU's MiCA regime.
The Qualifying Cryptoasset Trading Platform model allows overseas exchanges to serve UK clients through authorized local branches, but regulatory clarity on eligible jurisdictions remains lacking.
Over 85% of crypto firm applications failed under the FCA's current AML process, and expanded obligations in the new regime raise challenges for firms seeking timely approval and market entry.

Framework design favors global market access

As reported by CoinDesk, the Financial Conduct Authority's new framework is drawing early support from industry participants who say it avoids the more protectionist features seen in the European Union's Markets in Crypto-Assets regime. The rules are designed to let UK customers keep access to global trading venues and allow overseas-issued stablecoins to circulate, a structure that supporters say could improve pricing and market depth.

Katie Harries, Coinbase's head of policy for Europe, says the final rules mark a major step for regulatory clarity and for the UK's competitiveness in digital asset innovation. Christopher Collins, a financial markets and regulation partner at Katten Muchin Rosenman, says the new Qualifying Cryptoasset Trading Platform model should let overseas exchanges serve UK clients through locally authorized branches linked to existing global infrastructure.

Collins says that approach could help avoid a ring-fenced UK liquidity pool and give customers better outcomes. But he also says the FCA has not yet provided enough clarity on which overseas jurisdictions offer the comparable regulatory protections required for branch authorization, leaving firms without the certainty needed to build business models and commit investment.

Harries also points to DeFi as an unresolved issue. She says earlier proposals would in effect stop centralized platforms from offering access to decentralized finance applications, which could leave the UK out of step with jurisdictions such as the U.S. as policymakers there explore DeFi within broader tokenization strategies.

Authorization demands could shape industry uptake

Beyond the policy design, lawyers and investors say the success of the regime depends on how the authorization process works in practice. Thomas Cattee, a partner at Gherson Solicitors, warns there is a high risk of failure for firms seeking approval under the new Financial Services and Markets Act regime, especially because the existing anti-money laundering registration process is already highly demanding.

Cattee says the FCA has rejected or pushed the withdrawal of more than 85% of applications under the narrower AML process, and the new framework adds broader obligations covering Consumer Duty, prudential standards, operational resilience and senior management accountability. He also warns firms against waiting too long to apply, pointing to MiCA's rollout in Europe, where late applications contributed to licensing bottlenecks.

For institutional investors, the framework's wider value lies in legal certainty rather than any automatic improvement in crypto safety. Sandy Jones, director of digital assets at Baillie Gifford, says blockchain technology needs governance standards, operational resilience and clear rules before traditional financial institutions can adopt it at scale, and he says recent FCA refinements to the stablecoin regime help build settlement infrastructure without adding unnecessary friction.

The industry's reaction suggests the FCA is trying to position the UK as a pragmatic alternative to Europe's MiCA system. Whether that strategy draws firms to Britain over rival jurisdictions now depends on how predictably the rules are implemented in the coming months and whether remaining policy gaps are narrowed before they undermine the framework's competitive appeal.

Our earlier coverage of New Financial’s country-level ranking highlighted how the UK’s edge in global finance comes less from domestic scale and more from cross-border activity anchored in London. We noted the UK leads in internationally mobile business lines such as foreign exchange infrastructure, derivatives trading, international banking claims, and international corporate bond issuance—strengths that help explain London’s continued role as a global hub.

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