UK regulator details who needs a license under 2027 crypto rules
Regulation & Gov ·
The Financial Conduct Authority published draft guidance spelling out which crypto businesses must be licensed once the UK's regulatory regime takes effect, with the structure of a project offering no shield from oversight.
The draft, Consultation Paper CP26/36, sets out that the FCA will assess crypto operations based on who actually controls or runs a service rather than how it is labeled, meaning protocols described as decentralized finance are not automatically exempt. The guidance states that code and smart contracts themselves cannot be licensed, but the individuals or entities operating a service built on top of them can be brought into the regulatory perimeter. The paper also introduces carve-outs for certain UK stablecoin payment and reserve arrangements, as well as for technology providers whose role is limited to giving users access to a protocol without otherwise operating it.
The guidance is tied to the UK's broader crypto licensing regime, which is set to start on Oct 25, 2027. The FCA is treating the document as a draft rather than a final rule: the consultation window for public comment closes on Nov 18, and the regulator is aiming to issue final guidance in January 2027, leaving roughly two years before the licensing requirements take effect.
The release has been picked up alongside other coverage of the FCA's consultation process, with at least one additional report confirming the November 18 response deadline and framing the move as part of the UK's preparation for its 2027 crypto ruleset, a detail also referenced in posts tracking the announcement, including one on X.
What remains unresolved is how the FCA will apply the "who actually runs it" standard in practice to protocols with distributed governance, multiple contributors, or no single identifiable operator — a question likely to shape much of the public comment ahead of the November deadline. Also unclear is the final scope of the stablecoin and access-provider carve-outs, which could change between the draft and the January 2027 final guidance depending on industry feedback.