FCA consults on guidance for new UK cryptoasset exclusions, with forbearance for some applicants

What happened

The Financial Conduct Authority (FCA) opened a consultation on 21 Oct 2026 with consultation paper CP26/36. It proposes guidance on new exclusions from cryptoasset regulation in a second statutory instrument, the draft Cryptoassets Amendment Regulations. The Government laid that instrument the day before the FCA published its perimeter guidance, PS26/18, in September 2026.

What changed

The FCA proposes changes to its Perimeter Guidance Manual (PERG). Its examples of the new exclusions include:

• temporary settlement arrangements;
• temporary UK qualifying stablecoin holding arrangements for payment transactions;
• arrangements involving backing assets held in relation to a UK qualifying stablecoin;
• proprietary trading where a person is not providing a service to another person, or market making on a qualified cryptoasset trading platform (QCATP);
• technical services that merely allow access to services provided by a third party or to a decentralised protocol.

The technical services exclusion is from arranging deals in qualifying cryptoassets. It applies to providers that are not authorised under the Financial Services and Markets Act 2000 (FSMA) or payment services providers, and that are merely providing a technical service that allows another person to access a third person's services (where certain conditions are met) or a decentralised protocol. The FCA's paper says it "is not a general exclusion for services described as technological, technical, software-based or connected with decentralised finance", and does not extend to other regulated activities such as dealing.

The FCA also proposes guidance on how decentralisation can affect perimeter analysis, and on the distinction between qualifying stablecoins and electronic money.

Who is affected

The FCA says the consultation is for firms and persons carrying out, or planning to carry out, regulated cryptoasset activities in the UK after 25 Oct 2027; FSMA-authorised firms that may need to vary their permissions; firms considering whether exclusions apply; central securities depositaries with cryptoasset safeguarding arrangements; and trade associations and professional advisers.

The FCA says the timing of the publication of the instrument "will have created uncertainty" for a small number of firms around the need to be authorised. Where a firm can demonstrate that uncertainty about the technical services provider exclusion materially impacted its ability to submit a complete application, the FCA will exercise some forbearance. Such a firm, if it submits an otherwise complete application during the application period, gets additional time on incomplete aspects relating to the arranging permission.

What happens next

Comments close on 18 Nov 2026. The application period closes on 28 Feb 2027; firms that want the savings provision must apply within it. The regime comes into force on 25 Oct 2027.

The FCA's web page says it aims to publish final guidance in January 2027; the consultation paper says spring 2027.