UK to Start Approving Crypto Firms in 2026: What It Means for the Industry

The UK government is taking another step toward regulating the cryptocurrency industry. By 2026, the Financial Conduct Authority (FCA) plans to introduce a new approval system for crypto businesses. But what does this actually mean for investors, businesses, and the future of crypto in the UK? If you’re new to crypto, don’t worry—we’ll break it down in simple terms.

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What’s Happening?

Right now, the FCA is responsible for overseeing financial services in the UK, including cryptocurrency businesses. However, many crypto companies have struggled to get approval from the FCA. Since 2020, out of 365 companies that applied, only 48 were approved to legally operate in the UK.

To make the approval process clearer and more structured, the FCA is introducing a new "gateway" system in 2026. This means that all crypto firms operating in the UK will have to apply for official authorization under stricter rules.

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Why Is the UK Doing This?

The UK government wants to make the crypto industry safer and more reliable. While cryptocurrency offers exciting investment opportunities, it also comes with risks such as fraud, market manipulation, and companies operating without proper oversight.

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The FCA’s goal is to:

- Prevent scams and fraud by ensuring only trustworthy crypto firms can operate.

-  Improve financial stability by requiring crypto companies to follow strict rules.

- Encourage responsible growth of the crypto industry while protecting investors.

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What Will Change for Crypto Businesses?

1. Stricter Approval Process

○ Crypto companies will have to reapply for approval under the new system.

○ Only firms that meet the FCA’s new safety and transparency standards will be approved.

2. More Regulations on Crypto Trading

○ Businesses might have to hold more capital to ensure they can cover potential losses.

○ Rules on insider trading (when people use secret information to make unfair profits) and market manipulation will become stricter.

3. Higher Standards for Consumer Protection

○ Crypto firms will need to clearly explain the risks of investing in digital assets.

○ Companies might be required to refund customers in cases of fraud or financial failure.

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How Will This Affect Crypto Investors?

For everyday crypto users and investors, these changes could have both positive and negative effects:

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More Security – With better regulation, investors will have more trust in the crypto industry. Fraud and scams could become less common.

Stronger Crypto Market – If the UK creates clear rules, big businesses and institutions may feel safer investing in crypto, leading to growth in the sector.

Fewer Crypto Options – Some smaller or unapproved crypto firms might leave the UK, reducing the number of available exchanges or services.

Delays in Innovation – If the rules are too strict, crypto businesses might struggle to launch new projects, slowing down innovation.

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What’s Next?

Between now and 2026, the FCA will consult with crypto businesses and develop specific rules. In the meantime, investors and companies should stay informed about how the regulations will shape the future of crypto in the UK.

If you’re investing in crypto, this is a reminder to choose trusted platforms and stay updated on regulatory changes. The UK’s decision to introduce stricter rules could bring more stability to the market, but it also raises concerns about how much control the government will have over digital assets.

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For now, the best thing crypto users can do is watch how these rules develop and prepare for a more regulated future in the industry.

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RISK DISCLOSURE: This article is for informational purposes only and does not constitute investment advice. Cryptocurrency markets are highly volatile, and trading carries significant risk of loss. Always conduct your own research before making any investment decisions.

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Source:https://www.coindesk.com/policy/2025/03/28/uk-regulator-intends-to-start-authorizing-crypto-firms-in-2026

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