UK lays draft SI amending the 2026 Cryptoasset Regulations

The Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026 were laid before Parliament, accompanied by a draft explanatory memorandum. The Regulations were previously consulted on in April and make targeted amendments to the UK cryptoassets regulatory framework established by the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.

Amongst other amendments and additions, the Regulations:

• Exclude activities involving UK qualifying stablecoins by an authorised person under FSMA for the activity of issuing such stablecoins from the regulated activities of dealing in qualifying cryptoassets as principal, dealing as agent, and arranging deals in qualifying cryptoassets.
• Exclude the temporary holding of UK qualifying stablecoins from the cryptoasset safeguarding activity, where they are being held in connection with a payment transaction.
• Clarify the regulatory perimeter for issuing UK qualifying stablecoins and exclude backing asset arrangements for those stablecoins from the relevant safeguarding regulated activities.
• Introduce targeted exemptions for certain cryptoasset proprietary trading, market making, technical services, and central securities depository activities.
• Make related changes to the financial promotion regime, including clarifying the regulatory perimeter for stablecoin issuance and backing asset arrangements and mirroring the exemptions in the FSMA (Regulated Activities) Order 2001 for certain proprietary trading, market making and central securities depository activities.
• Create a new controlled activity for the purposes of the financial promotion restriction (issuing qualifying stablecoin) and consequently a new controlled investment (qualifying stablecoin).
• Bring forward the commencement of provisions that provide that assets backing qualifying stablecoins are not treated as collective investment schemes, alternative investment funds or electronic money.

The changes are intended to remove overlapping or disproportionate regulatory requirements and unnecessary regulatory barriers, while maintaining high standards of regulation for activities that present material risks to consumers or market integrity. Firms excluded from regulation by this instrument continue to have obligations under other legislation, including anti-money laundering requirements.

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