FCA’s Survey and Roadmap Reveal UK’s Crypto Regulation Outlook

According to Tulip Siddiq, Economic Secretary to the Treasury, all cryptocurrency regulations will be implemented in one go by the Financial Conduct Authority (FCA). The FCA has outlined a roadmap for consultations.

The United Kingdom has adopted a different approach to regulating cryptocurrencies, including stablecoins and staking, after a change in government leadership. Previously, there were expectations that stablecoin and staking regulations would have been implemented by now. The Labour government emphasizes innovation, so the timing for implementing stablecoin regulation has become secondary.

FCA's Roadmap and Consultation Plan

The FCA has clarified its regulatory approach toward the crypto industry. The legislation is expected to be finalized by 2026, toward the end of the year. The comprehensive regulatory overhaul will involve multiple stages of consultation.

As part of the roadmap, the FCA is preparing initial discussion papers on crucial issues such as admission standards, disclosures, and market abuse. These papers are expected to be released within the quarter, and formal consultations are scheduled for the third quarter of 2025.

The FCA has divided the consultations into four key areas:

Trading platforms, intermediation, lending, staking, and prudential exposures
Stablecoins, custody, and prudential standards
Conduct and firm standards for regulated activities
Market behavior and disclosures related to decentralized projects

The decentralized nature of the crypto industry poses challenges for the FCA. For example, it can be difficult to obtain data from decentralized issuers. The FCA has proposed that exchanges could play a role by providing information based on publicly available data. This would encourage decentralized projects to make their data more accessible, as exchanges would want to list more projects while keeping their workload manageable.

Crypto Ownership and Awareness in the UK

The latest YouGov survey indicates that the number of cryptocurrency holders in the UK continues to rise. In 2023, 12% of UK adults reported holding cryptocurrency, up from 10% in 2022. The average investment per holder also increased from £1,595 to £1,842. This growth shows increased crypto awareness, as 93% of respondents reported being familiar with cryptocurrency, up from 91% the previous year.

Bitcoin remains the most widely known cryptocurrency, with 78% awareness. Ethereum is second at 31%, followed by Dogecoin at 30%. Lesser-known coins like Solana and TRON are also recognized by 11% and 10% of respondents, respectively. Among crypto holders, Ethereum and Dogecoin are nearly as well known as Bitcoin, indicating their growing popularity.

Despite increased ownership, misconceptions about crypto regulation persist. Research shows that one-third of crypto owners are unaware that it is not regulated. This means that they cannot file a complaint with the FCA regarding unregulated crypto investments, and any losses incurred are not recoverable.

The Impact of Crypto Advertising

The role of advertising in crypto adoption is mixed. While 60% of respondents said that advertising did not influence their investment decisions, a small percentage of those exposed to crypto ads took action. For example, 2% of respondents who had not considered buying crypto decided to invest after seeing an advert, and 10% of those considering crypto made a purchase. However, the advertisements also deterred 9% of the respondents from investing.

Despite growing interest and aggressive marketing efforts, crypto remains a high-risk investment in the UK. The lack of regulatory oversight means that investors are not protected if things go wrong. They should be aware that they could lose their entire investment.

Matthew Long, the FCA's director of payments and digital assets, said that clear rules are necessary to make the crypto sector safe, competitive, and sustainable. He stated that the FCA would collaborate with the UK government, international partners, industry players, and consumers to ensure that the rules are well-crafted to support innovation while maintaining market integrity and consumer trust.

As the FCA continues to shape the future of crypto regulation in the UK, the industry is closely following the government's steps toward implementing a robust framework by 2026.