The UK Financial Conduct Authority announced two consultation periods this week on DeFi and cryptoasset regulation. The Wednesday notice outlined plans to gather feedback on how DeFi companies can comply with existing anti-money laundering and financial crime rules.
The FCA said the proposed guidance aims to clarify current regulations rather than establish new policy for DeFi operations. The initiative follows the agency's recent reveal of a broader regulatory regime that includes provisions for stablecoin holding arrangements and reserve assets.
The second consultation focuses on exclusions from cryptoasset regulation, citing recent legislative changes. The FCA opened applications for crypto entities on Sept. 30, with firms having until Feb. 28, 2027, to submit compliance applications. The full regulatory regime, encompassing stablecoin and reserve asset arrangements, is expected to be enforced starting in October 2027.
The UK Cryptoasset Business Council said DeFi represents "among the most innovative parts of" the financial services sector and stressed the need to "strike the right balance" between clear perimeter rules, proportionate expectations, and a framework that fosters responsible innovation. The council said the FCA "needs to get this right" to prevent innovation from migrating elsewhere.
