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Quick read
In this context, since the start of the year, the FCA has shared on its website information about the authorisation application process. Additionally, on 29 January 2026, members of the FCA's Authorisations team hosted an introductory webinar on the subject of the new cryptoasset regime, offering timely insights on what the regulator expects next. We consider some of the key areas and next steps for firms in this blog post. |
Key areas
- Go-live date for the new UK cryptoasset regime: 25 October 2027 (the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025 (Cryptoasset Regulations) are currently in draft form and laid before Parliament).
- Applicants:
- Unregulated firms, including those registered with the FCA under the MLRs 2017, will need to apply to the FCA for authorisation.
- Regulated firms will need to apply for a variation of
permission.
- Authorisation application period: the application period starts on 30 September 2026 and closes on 28 February 2027 (Application Period).
- Potential outcomes of the authorisation
process:
- Applications submitted during the Application Period:
- Scenario 1 – Application approved: the FCA expects to determine applications before the new regime is in force.
- Scenario 2 – Application under review: if, however, the FCA has not made a final determination on a firm's application that was submitted during the Application Period, the Cryptoasset Regulations include a saving provision allowing the relevant firm to continue to provide cryptoasset services until the FCA has done so (Saving Provision). However, the FCA will have power in certain circumstances to direct a firm into the Transitional Provision (see below).
- Scenario 3 – Application withdrawn or rejected: if the application has been rejected by the FCA, the Cryptoasset Regulations provide for a transitional provision that will come into effect at the same time as the new cryptoasset regime and will run for two years, until 25 October 2029 (Transitional Provision). Firms in the Transitional Provision will not be able to enter into new contracts with existing UK customers or enter into new contracts with new UK customers.
- Applications submitted after the Application Period, but before
the go-live date of the new regime:
- Scenario 1 – Application approved: the FCA will not expedite its assessment process in these circumstances so there is no guarantee that the applications will have been processed in time for the go-live date of the new regime.
- Scenario 2 – Application under review: the Saving Provision does not apply. Firms instead will enter the Transitional Provision until the FCA has concluded its assessment of the application.
- Scenario 3 – Application withdrawn or rejected: firms will enter the Transitional Provision.
- Applications submitted during the Application Period:
- Application forms: the FCA expects to publish application forms between June and July 2026 and will provide further information on applications in due course.
- Pre-application support: firms can request a pre-application meeting with the FCA via its pre-application support service (PASS), which will be available in relation to cryptoasset authorisation applications from July 2026. PASS is optional and free of charge. Although using PASS does not guarantee a successful application outcome, it enables firms to have initial discussions with the FCA about their business, the authorisation process and the FCA's expectations, with the aim of helping them to put together good applications for submission.
- FCA assessment of applications: the FCA assessment process will be comprehensive, as with any authorisation application (or variation of permission) under the Financial Services and Markets Act (FSMA) and will be much broader than the current MLRs registration process. Small firms should highlight their status to the FCA when applying, and the FCA will be applying the proportionality principle when conducting application assessments. However, all firms should think carefully about the cryptoasset business model they will be presenting and how they intend to manage risks.
Next steps
- Firms should assess which cryptoasset activities they currently undertake (or plan to undertake), determine whether authorisation or a variation of permission will be required, and start preparing so they are ready to submit their application within the Application Period.
- In the meantime, a number of cryptoasset consultation papers are still open, so there is an opportunity for firms to engage proactively with the FCA on requirements that will directly affect their business models.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
