UK FCA Launches Consultations on DeFi and Crypto Regulation Ahead of 2027 Framework

The UK Financial Conduct Authority (FCA) has opened two consultations aimed at shaping the regulatory landscape for decentralized finance (DeFi) and crypto assets. On October 21, 2026, the FCA published Guidance Consultation GC26/7 and Consultation Paper CP26/36, inviting feedback from industry participants by November 18, 2026.

GC26/7 focuses on how firms utilizing or providing access to DeFi protocols can meet existing regulatory obligations, specifically addressing operational resilience, compliance, and financial crime controls. The FCA emphasizes a case-by-case approach, particularly targeting intermediaries rather than the decentralized protocols themselves.

CP26/36 addresses regulatory exclusions for various activities, including temporary settlement arrangements and stablecoin handling, clarifying where regulated financial activity intersects with ordinary blockchain software. This distinction is crucial for developers and businesses as they prepare for the full crypto regulatory regime set to take effect on October 25, 2027.

As firms navigate this evolving regulatory environment, they must closely examine the consultations and consider submitting responses that may influence the final guidance expected in January 2027. The FCA's proactive stance aims to establish a clearer framework for crypto businesses operating in the UK, particularly those involved in platforms, trading, and stablecoin issuance.