FCA Prudential Regime for Cryptoasset Firms

CP25/15 introduced proposals for firms issuing qualifying stablecoins and safeguarding qualifying cryptoassets. CP25/42 extended the framework to firms operating qualifying cryptoasset trading platforms, arranging qualifying cryptoasset staking, arranging deals, and dealing in qualifying cryptoassets as agent or principal. Principal dealing includes certain lending and borrowing business models. The statutory perimeter is established by the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.

The FCA proposes two new sourcebooks. COREPRU would contain common rules on financial adequacy, own funds, fixed overheads, liquidity, concentration risk and the general risk-assessment process. CRYPTOPRU would contain cryptoasset-specific minimum capital, K-factor, issuer-liquidity, risk-assessment and disclosure requirements. The framework is designed for solo FCA-authorised firms, although group risks would still need to be assessed and disclosed.

A firm’s minimum own-funds requirement would be the highest of three measures: its permanent minimum requirement, fixed overheads requirement and aggregate K-factor requirement. Where a firm has several cryptoasset permissions, the highest applicable permanent minimum would apply.

• £750,000 for dealing in qualifying cryptoassets as principal.
• £350,000 for issuing qualifying stablecoins.
• £150,000 for safeguarding cryptoassets, arranging staking or operating a qualifying cryptoasset trading platform.
• £75,000 for dealing as agent or arranging deals.

The fixed overheads requirement would generally equal one quarter of the firm’s relevant expenditure in the previous year. It is intended to provide capital linked to the cost of absorbing losses and executing an orderly wind-down.

The proposed K-factors scale capital with particular business risks. Stablecoin issuers would calculate K-SII at 2% of average qualifying stablecoins in issuance. Custodians and staking arrangers would calculate K-QCS and K-CCS at 0.04% of average safeguarded or staked client cryptoassets. Client-order and trading-flow measures would each be 0.1% of the relevant average. Firms with trading-book positions would also face net cryptoasset position charges: 40% for assets meeting the proposed Category A conditions and 100% for Category B assets. Separate measures would address counterparty default and concentration risk.

All in-scope firms would maintain a basic stock of core liquid assets equal to one third of the fixed overheads requirement plus 1.6% of guarantees provided to clients. Qualifying stablecoin issuers would also calculate an issuer liquid-assets requirement linked to the composition and maturity of backing assets.

Each firm would complete an overall risk assessment covering material harms, stress testing, recovery options, ongoing operations and orderly wind-down. That assessment could produce own-funds and liquid-assets thresholds above the formulaic minimums. The governing body would approve it at least annually, and the firm would review it after a material change to its business or operating model.

The FCA also proposes public prudential disclosures at least annually. These would cover risk management, the composition of own funds, minimum and K-factor requirements, firm-specific threshold requirements and relevant group arrangements. Firms dealing as principal would provide additional financial information about their ultimate parent.

The underlying Cryptoassets Regulations were made on 4 February 2026 and permit preparatory FCA rulemaking before full commencement. The FCA says its authorisation gateway for cryptoasset permissions will open on 30 September 2026. The prudential proposals themselves remain subject to consultation feedback and final policy statements, so the figures and methods in this profile should be checked against the final Handbook instruments before the regime takes effect.

This profile is a neutral legal reference and does not provide legal, tax, investment or trading advice.