The impact of FCA cryptoasset rules on the UK market
FCA regulations require stablecoin issuers to hold minimum capital of £350,000 and custodians to hold £150,000. These rules follow Revolut obtaining its license and the FCA selecting four firms for its stablecoin sandbox to test payments and settlement use cases.
Revolut’s registration and the open gateway
The FCA opened its cryptoasset application gateway in September 2026. This allows firms to submit applications before the regime commences on 25 October 2027. Revolut obtained its license to provide digital asset trading and custodial services after it sat on the temporary register for several months. Out of 200 virtual asset service providers that applied for licenses, only 38 firms obtained authorization. This follows the European Union deadline on 1 July 2026, when the MiCA regulation forced all firms to hold full authorization or stop serving EU clients. Only 244 firms secured a MiCA license by that date. In jurisdictions like Poland, the end of the transitional period created a sharp cliff edge for firms that assumed continuity. The FCA selected four firms for its stablecoin sandbox in early 2026. These firms include Monee Financial Technologies, ReStabilise, Revolut, and VVTX. The FCA received 20 applications for this sandbox. The selected firms test use cases such as payments, settlement, crypto trading, and digital asset issuance. You should watch how these registration bottlenecks affect market competition.
Specific requirements for stablecoin and custody firms
FCA consultation papers CP25/14 and CP25/15 set the rules for stablecoin issuance and cryptoasset safeguarding. Issuers must hold backing assets in a statutory trust for the benefit of clients. Firms must also fulfill redemption requests within 1 business day. The CRYPTOPRU regime imposes specific capital requirements based on activity.
| Requirement Type | Stablecoin Issuers | Cryptoasset Custodians |
|---|---|---|
| Minimum Capital | 2% of average stablecoin in issuance | 0.04% of average qualifying cryptoassets |
| Liquid Asset (BLAR) | 1/3 of fixed overhead requirement | 1/3 of fixed overhead requirement |
| Liquid Asset (ILAR) | 1.6% of total guarantees | Not applicable |
The 2% capital requirement for stablecoin issuers relies on the average amount of stablecoins in issuance. This calculation uses the total amount of stablecoins in issuance at the end of each business day for the previous 9 months. The formula deducts the values for the past 3 months and uses the mean of the daily values for the remaining 6 months. For custodians, the capital requirement equals 0.04% of the average qualifying cryptoassets safeguarded. Firms must also meet a liquid asset requirement equal to one third of their fixed overhead requirement. Issuers must hold liquid assets equal to 1.6% of the total amount of any guarantees provided to clients. These liquid assets include banknotes, short term deposits, treasury bonds, or money market fund units. Firms must perform daily valuations of the backing asset pool. If they find a shortfall during daily reconciliations, they must top up the pool within 1 business day. The minimum capital for stablecoin issuers stands at £350,000, while custodians must hold £150,000.
Enforcement and the registration vacuum
The FCA issued cease and desist letters to three London premises on 10 September 2026 for facilitating unregistered peer-to-peer crypto trading. Currently, zero FCA-registered peer-to-peer crypto businesses operate in the UK. This lack of registered entities creates risk for money laundering and financial crime. Compliance teams at crypto firms must review their frameworks to ensure they do not associate with unregistered trading operations. The regulator will deny service to any firm that fails to meet these new standards. Firms that submit an application during the gateway period should have their applications assessed by the FCA ahead of the commencement of the new regime to ensure they can maintain continuity of service for their clients. The regulator maintains a harsh environment for firms that fail to meet the minimum capital requirement of £350,000 for stablecoin issuers or £150,000 for custodians. The FCA previously issued a warning to the exchange FTX for offering services in the UK without a license. Will the FCA maintain this strictness when more firms apply through the gateway?
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