New UK cryptoasset regime: greater clarity on regulatory perimeter as FCA authorisation application gateway opens

Amending Regulations: an updated statutory regime

The statutory framework for the new cryptoasset regime has continued to evolve since the Cryptoasset Regulations were made.

In April 2026, while the FCA was consulting on its perimeter guidance, HM Treasury published a draft statutory instrument (the Financial Services and Markets Act 2000 (Cryptoassets) (Amendment) Regulations 2026) making targeted and clarifying amendments to the Cryptoasset Regulations, together with consequential amendments to related legislation (i.e. the Financial Services and Markets Act 2000 (Regulated Activities Order) 2001 (RAO) and the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (FPO)). Technical comments were invited and the government engaged with industry. For more information on the content of the draft statutory instrument, and the government’s policy intent, see our blog post. 

Subsequently, the final draft statutory instrument was laid before Parliament in September 2026 with a slightly changed title: the Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026. An accompanying final draft explanatory memorandum (Explanatory Memorandum) was also published, noting that the sector was largely supportive of the proposed amendments and, where appropriate, feedback had been incorporated.

UK qualifying stablecoins: avoiding regulatory overlap

The main purpose of the Amending Regulations is to exclude “UK qualifying stablecoin” (UKQS) (defined as a qualifying stablecoin that is issued by an authorised person with permission to carry on the regulated activity of issuing qualifying stablecoin) from the regulated activities of dealing (as principal or agent) in qualifying cryptoassets, and arranging deals in qualifying cryptoassets. However:

• these activities remain in scope where they involve qualifying cryptoassets other than UKQS; and 
• lending and borrowing involving UKQS also remain in scope. 

Institutional collateral and repurchase agreement arrangements are excluded from the dealing and arranging activities for all qualifying stablecoin, whether issued in the UK or overseas. 

The government took the decision to bring forward these amendments to the cryptoasset regime to avoid an additional and overlapping burden being imposed on firms providing stablecoin payment services using UKQS ahead of completion of the government’s wider payments services reforms. In July 2026, HM Treasury published a consultation outlining its intention to modernise the legislative framework for payment services and e-money regulation, including bringing tokenised payments - such as stablecoin - into the payments regulatory perimeter.

As made, the drafting of the Cryptoasset Regulations means that payment activities involving UKQS are likely to fall within the perimeter for dealing and arranging under the new UK cryptoasset regulatory regime. This would result in relevant firms being required to obtain permissions to operate under that regime before potentially having to apply for separate permissions under the reformed UK payments framework. The Explanatory Memorandum states that the government “considered that outcome disproportionate because the relevant cryptoasset activities were intended to regulate trading-like activities rather than payment transactions.” The Amending Regulations resolve this issue. 

Other targeted changes

The Amending Regulations also:

• Exclude the temporary holding of UKQS from the cryptoasset safeguarding activity where they are being held in connection with a payment transaction. 
• Clarify the regulatory perimeter for issuing UKQS.
• Exclude backing asset arrangements for UKQS from the relevant safeguarding regulated activities. 
• Introduce targeted exclusions for certain cryptoasset proprietary trading, market making, technical services, and central securities depository (CSD) activities. (The Explanatory Memorandum advises that the addition of these exclusions is aimed at addressing issues identified from the government’s industry engagement following publication of the framework for the cryptoasset regulatory regime. The amendments aim to reduce compliance costs, increase regulatory certainty and support responsible innovation in stablecoin, cryptoassets and tokenised investments.)
• Make related amendments to the FPO, including:
  • clarifying the regulatory perimeter for stablecoin issuance and backing asset arrangements;
  • reflecting in exemptions the exclusions in the RAO for certain proprietary trading, market making and CSD activities (but the exclusion for technical service providers is not replicated); and 
  • creating a new controlled activity (issuing a qualifying stablecoin) for the purposes of the financial promotion restriction and a new controlled investment (qualifying stablecoin) for the purposes of the financial promotion regime. 
• Make consequential or clarifying changes to the Cryptoassets Regulations and related legislation to ensure the regulatory framework operates as intended.

What happens next?

The Amending Regulations have not yet been made. They will come into force the day after the day on which they are made, with the exception of regulation 2 (amendments to the RAO) and regulation 3 (amendments to the FPO), which will come into force on 25 October 2027. 

The Amending Regulations bring in early commencement of provisions in the Cryptoasset Regulations (regulations 43, 46 and 47) which amend the Financial Services and Markets Act 2000 (Collective Investment Schemes) Order 2001, the Electronic Money Regulations 2011 and the Alternative Investment Fund Managers Regulations 2013 respectively. These will now come into force 21 days after the day on which the Amending Regulations come into force. The Explanatory Memorandum clarifies that the policy intent here is “to avoid creating unnecessary barriers to the adoption of qualifying stablecoins across different use cases and the provision of related services, ahead of the cryptoassets regulatory regime coming fully into force in October 2027.”

FCA perimeter guidance on regulated cryptoasset activities (PS26/18)

In June 2026, the FCA published its long-awaited package of five policy statements for the new cryptoasset regulatory regime - see our blog post for more information. One of the policy statements (PS26/11) set out final rules and guidance in relation to regulated cryptoasset activities. However, firms were still waiting for accompanying FCA final perimeter guidance on these new regulated activities.

Having consulted earlier this year (see our blog post), the FCA has now finalised its perimeter guidance. In September 2026, it published PS26/18, which also summarised consultation responses and the FCA’s feedback.

The key takeaway for firms is that the FCA has introduced, with effect from 16 September 2026, a new chapter 18 to its Perimeter Guidance Manual (PERG) containing guidance dedicated to cryptoasset activities. The aim is to:

• help clarify the regulatory perimeter; and 
• improve understanding of the scope of the new regulated cryptoasset activities and when authorisation and permissions may be required.

In finalising PERG 18, the FCA has in general taken forward its consultation proposals, focusing on providing clarity on the relevant statutory concepts and principles. It emphasises that cryptoasset business models vary significantly and, as the application of the perimeter often depends on the particular facts and circumstances, it is not possible for PERG 18 to address every business model, arrangement or technological structure. It is the responsibility of firms to ensure they have the correct permissions for or are exempt in relation to the activities they intend to carry on.

In the light of consultation responses, the FCA has made some targeted clarifications to PERG 18; it does not consider any of the changes to be significant. In the table below, we provide a brief overview of the key additions and clarifications made to the guidance as consulted on.

What happens next?

The finalised PERG guidance is based on the Cryptoasset Regulations as made in February 2026. However, as noted above, while the FCA was consulting, the government published a draft statutory instrument amending the Cryptoasset Regulations and it subsequently laid the Amending Regulations before Parliament. 

The amendments being made to the Cryptoasset Regulations will impact certain business models and the type of permission(s) firms may require. In turn, this will affect what the FCA describes as “a small number of provisions within PERG” - notably guidance on the scope of the arranging and dealing activity, and activities carried on in relation to UKQS. 

The FCA therefore intends to consult in early Q4 2026 on further amendments to PERG to reflect the Amending Regulations. In consultation feedback set out in PS26/18, it also indicates that this consultation will cover:

• Guidance on the distinction between e-money and qualifying stablecoins.
• Further guidance on the temporary settlement arrangements exclusion in article 9Q of the RAO.

The FCA aims to publish final amended PERG guidance in early 2027.

Actions for firms

Firms that intend to engage in regulated cryptoasset activities will need to carefully consider PERG 18 and the Amending Regulations, together with the FCA cryptoasset policy statements and the Cryptoasset Regulations, to identify the legal requirements, rules and guidance relevant to their business models, and assess whether they must apply for authorisation or a VoP under the new regime. 

A considered analysis that takes account of the full legislative and regulatory framework will be crucial. While the guidance in PERG 18 is helpful in clarifying the FCA’s interpretation of the regulatory perimeter for the purposes of considering authorisation or VoP applications, the FCA makes clear in PS26/18 that PERG is “not the appropriate place to provide detailed guidance on individual business models, technological arrangements or use cases”. Working through these matters systematically is a task for firms themselves, with support from compliance and legal teams, and external advisers.

Firms should also note that, once the Amending Regulations have been made and the FCA has revised its PERG cryptoasset guidance as necessary, they will have to re-do their analysis to determine the impact of the legislative and regulatory changes on their business model, governance and systems and controls. 

Meanwhile, the authorisation application gateway is open and firms should not lose sight of the 28 February 2027 deadline: the FCA’s expectation is that firms will submit their applications for authorisation (or a VoP) during the application period window. Dual-regulated firms will also need to contact the PRA if they intend to apply for a VoP.