The UK’s Financial Conduct Authority (FCA) recently published DP25/1, its latest policy paper in its crypto roadmap for developing the future regulation of cryptoasset activities. The paper discusses the regulation of trading platforms, intermediaries, staking, lending and borrowing, as well as decentralised finance (DeFi).
Under regulation for intermediaries, the FCA is considering applying the “same risk, same regulatory outcome” principle, as well as pre- and post-trade transparency requirements.
The paper reveals a priority for consumer protection: it proposes restricting firms from offering cryptoasset lending and borrowing to retail customers and disallowing the use of credit in the purchase of cryptoassets – unless the cryptoasset is a stablecoin from an FCA authorised issuer. It also proposes that firms be required to get explicit consent from retail customers on certain details before staking, including the amount of staked cryptoassets, conditions for payment and repayment, as well as fee structures.
Under HM Treasury’s (HMT) current draft statutory instrument (SI), DeFi activities are not subject to regulations if they are “truly decentralised”. However, “when DeFi involves the proposed regulated activities, and where there is a clear controlling person(s) carrying on an activity, then these activities will be covered by the regime,” the paper writes. This follows the “same activity, same regulatory outcome” principle. Such activities include “services that involve an identifiable intermediary or entity that has control over business operations and product features”.
DP25/1 follows DP23/4 published in November 2023, which covered the development of a regime for fiat-backed stablecoins and DP24/4 published in December 2024, which discussed the FCA’s proposed frameworks for admissions and disclosures and market abuse regime for cryptoassets.
The deadline for comments is 13 June 2025.
