The Financial Conduct Authority (FCA) in the UK has outlined a new prudential framework for cryptoasset firms in consultation paper CP25/42, published on 16 December 2025. This regime aims to ensure firms maintain adequate capital and liquidity to protect consumers and maintain market integrity. It builds on earlier proposals and covers activities such as trading platforms and staking.
In late 2025, the UK advanced its regulatory framework for digital assets. On 15 December 2025, HM Treasury published a revised draft of The Financial Services and Markets Act 2000 (Cryptoassets) Order 2025. The following day, the FCA released three consultation papers, including CP25/42 on a prudential regime for cryptoasset firms. This paper extends requirements from CP25/15 to activities like operating a qualifying cryptoasset trading platform (CATP), staking, arranging deals, and dealing as agent or principal in qualifying cryptoassets.
The proposed rules appear in two sourcebooks: COREPRU for cross-sectoral requirements and CRYPTOPRU for cryptoasset-specific ones. They align with FCA objectives of consumer protection, market integrity, and competition. Firms must hold own funds at least equal to the own funds requirement (OFR), the highest of the permanent minimum requirement (PMR), fixed overhead requirement (FOR), and K-factor requirement (KFR).
PMR levels vary by activity: £750,000 for dealing as principal in qualifying cryptoassets, £150,000 for operating a CATP, and £75,000 for staking, dealing as agent, or arranging deals. For multiple activities, the highest PMR applies. K-factors address operational and exposure risks, such as 0.1% of average client cryptoasset orders for K-CCO and position risk adjustments of 40% for Category A cryptoassets or 100% for Category B.
Category A cryptoassets must meet conditions like trading on a UK CATP, stable history of at least three years, and low volatility below 5%. The regime introduces an overall risk assessment framework, replacing the internal capital adequacy and risk assessment (ICARA) process. Firms must identify risks, conduct stress testing, and prepare wind-down plans, with annual sign-off by the governing body.
Liquidity rules include a basic liquid assets requirement (BLAR) of one-third of FOR plus 1.6% of client guarantees. Stablecoin issuers face an additional issuer liquid assets requirement (ILAR). Firms must disclose prudential information annually, including risk management and group arrangements. The consultation closed on 12 February 2026, with final rules expected in 2026.
