UK Crypto Licence: FCA Cryptoasset Authorisation, Capital, Fees and Deadlines

Which activities need a UK crypto licence?

SI 2026/102 inserts seven new regulated activities into the Regulated Activities Order. A firm needs FCA permission for each activity it carries on. A "qualifying cryptoasset" is a fungible, transferable cryptoasset, such as bitcoin or ether. Electronic money and central bank digital currency are excluded. A "qualifying stablecoin" is a qualifying cryptoasset that aims to hold a stable value against a fiat currency, backed by fiat or other assets.

Do overseas crypto firms need UK authorisation?

Yes, in most consumer-facing models. SI 2026/102 extends section 418 FSMA so that an overseas firm is treated as carrying on business in the UK when it sells or buys qualifying cryptoassets with a UK consumer and no UK-authorised intermediary sits between them. The same applies where it safeguards or stakes cryptoassets for a UK consumer other than at the direction of an authorised firm. A "consumer" here means an individual in the UK acting outside any trade or profession.

Stablecoin issuance is caught where the issuing activities are carried on in the UK, including through a UK establishment.

On structure, the FCA generally expects an international cryptoasset firm to hold its authorisation in a UK legal entity. An overseas trading platform may in some circumstances operate through an authorised UK branch alongside a UK entity. Firms also regulated by the Prudential Regulation Authority may operate from a branch where the PRA agrees. The FCA assesses legal form case by case.

What the FCA assesses

The FCA assesses applications against the FSMA threshold conditions: the minimum standards every authorised firm must meet and keep meeting. In its announcement of the gateway the FCA said it judges applicants on consumer protection, safeguarding of customer assets, market integrity and financial resilience.

• - Threshold conditions: UK location of offices where required, effective supervision, appropriate financial and non-financial resources, suitability of the firm and its controllers, and a sound business model
• - Senior Managers and Certification Regime (SM&CR): senior individuals need FCA approval for their senior management functions and carry personal responsibility
• - Consumer Duty: the FCA requirement that firms deliver good outcomes for retail customers, including fair value and clear communications
• - Conduct of business (COBS), complaints handling (DISP) and Financial Ombudsman Service access
• - Client assets: CASS 17 sets custody rules for client cryptoassets, including segregation, records and reconciliations
• - Systems and controls (SYSC), including operational resilience under SYSC 15A
• - Prudential rules in COREPRU and CRYPTOPRU: capital, liquidity and an overall risk assessment
• - Financial crime controls under the Money Laundering Regulations, including the Travel Rule for cryptoasset transfers

Capital and liquidity requirements (CRYPTOPRU)

The FCA published its final prudential rules in PS26/12 in June 2026. Own funds (the firm's qualifying capital, mainly share capital and retained profits) must be at least the highest of three amounts: the permanent minimum requirement (PMR), the fixed overheads requirement (FOR) and the K-factor requirement (KFR). The PMR is a threshold condition, so a firm cannot be authorised unless it holds it. The FCA declined to phase it in.

The FOR is one quarter of the firm's relevant expenditure in the preceding year, a proxy for the cost of an orderly wind-down. The K-factor requirement scales with activity: for example 1% of the average value of stablecoins in issue for issuers (reduced from 2% in the final rules), 0.04% of the average value of client cryptoassets safeguarded, and 0.1% of the average value of client orders handled. Firms must also hold core liquid assets of at least one third of the FOR plus 1.6% of any client guarantees.

Stablecoin issuers: the additional rules

Issuing a qualifying stablecoin in the UK is its own permission, with a £350,000 PMR and a K-factor of 1% of the average value of coins in issue. PS26/10 sets the final issuance rules. Backing assets are held on statutory trust for holders. Holders have a right to redeem at par, and the issuer must pay out by the end of the next business day after it receives the coin being redeemed, with identity checks completed beforehand.

Issuers must also meet an issuer liquid asset requirement so they can restore full backing by the next business day if asset values move. Stablecoins that the Bank of England recognises as systemic come under joint Bank of England and FCA supervision. UK-issued qualifying stablecoins are excluded from the restricted mass market investment marketing rules.

Trading platforms, admissions and market abuse

Operating a qualifying cryptoasset trading platform carries a £150,000 PMR and the highest application fee, £28,150. PS26/9 adds an admissions and disclosures regime: platforms set admission criteria, carry out due diligence and require a qualifying cryptoasset disclosure document before a token is admitted. SI 2026/102 also prohibits insider dealing, unlawful disclosure of inside information and market manipulation in qualifying cryptoassets.

PS26/11 sets the platform and intermediary conduct rules. Platform operators may carry out matched principal trading, where the platform stands between buyer and seller without taking market risk, subject to conditions. Best execution requires effective overall arrangements with periodic monitoring rather than checks on every trade.

Firms already FCA-authorised

Banks, investment firms and other firms that already hold FSMA (Part 4A) permission apply to vary that permission, submitting the FCA cryptoasset form with the variation of permission application inside the same window. Payment and e-money institutions authorised only under the Payment Services Regulations or the Electronic Money Regulations hold no Part 4A permission, so they apply for a new Part 4A authorisation instead. A Part 4A firm that starts crypto business after 25 October 2027 without the new permission acts outside its permission under section 20 FSMA.

Financial promotions after commencement

Today, an unauthorised firm can market cryptoassets to UK consumers if an FCA-authorised firm approves the promotion (an s.21 approver), or if the firm is MLR-registered and relies on the Article 73ZA exemption. SI 2026/102 removes Article 73ZA at commencement.

Once authorised, a cryptoasset firm communicates its own promotions and no longer needs an approver. It can also approve promotions for unauthorised companies in its own group. A firm that applied in the window may keep using its s.21 approver until its application is decided.

28 February 2027: what to finish before the application window closes

The FCA application window closes on 28 February 2027, which falls on a Sunday. Applications go through FCA Connect, so firms should plan to file by Friday 26 February 2027 at the latest, leaving working days to fix any upload, signature or fee problem. Filing inside the window is what gives a firm the saving provision: if its application is still being decided on 25 October 2027, it can keep operating, including taking new business, until the FCA decides.

The FCA has said it will reject applications that lack its minimum information and that poor-quality applications face delay or refusal. Its own figures for the current MLR registration regime show how demanding its assessment is: as at 1 October 2026 it had received 427 cryptoasset registration applications since January 2020, registered 68 firms and seen 265 applications withdrawn.

The FCA published an information document on 17 September 2026 listing every question in the application form. It has a core section that applies to most firms and modules that apply by activity. The table sets out what to have final and signed off before filing.