LONDON — The UK Financial Conduct Authority opened two consultation periods this week, addressing compliance guidance for decentralized finance companies and exclusions from its forthcoming crypto asset regulation.
One consultation focuses on how DeFi companies can adhere to existing anti-money laundering and financial crime rules. The FCA said the proposed guidance "seeks to clarify existing rules rather than establish new policy."
The second consultation covers exclusions from crypto asset regulation under a new regime that includes frameworks for stablecoin holding arrangements and reserve assets. The regime is scheduled for enforcement in October 2027. The FCA opened the application process for crypto entities on Sept. 30, with a deadline of Feb. 28, 2027, to submit applications.
Compliance with anti-money laundering measures typically requires identity verification or transaction monitoring, which can introduce friction to permissionless systems. The FCA's focus on stablecoin holding arrangements and reserve assets highlights its emphasis on on-chain collateral integrity, with direct implications for the tokenized real-world asset sector that increasingly relies on regulated stablecoins and compliant reserve structures.
The UK Cryptoasset Business Council said DeFi represents "among the most innovative parts" of financial services, calling on the FCA to "strike the right balance — clear perimeter rules, expectations that stay proportionate, and a framework that lets responsible innovation take root here instead of migrating elsewhere."
