UK Signals New Crypto Era as FCA Co-Designs Rules With Industry

The trial aims to test standardized disclosure templates that could form the backbone of the UK's new crypto rulebook, due for publication in 2026.

The sandbox trial is part of the FCA's broader "Crypto Roadmap", a sequenced plan to bring clarity to a sector which has variously fallen into regulatory grey zones. In inviting established firms like Coinbase, Crypto.com, and Kraken to come into the sandbox and collaborate, what the regulator is doing is signaling a shift: rather than just imposing top-down rules, it wants to allow an industry that lives with practical challenges to co-design frameworks that embed transparency and investor protection.

Eunice will help “financial institutions, regulators and businesses navigate cryptoassets, tokenised assets and on-chain infrastructure.” The firm has already designed standardized disclosure templates intended to give investors clearer, more consistent information before purchasing crypto. The results of the sandbox will “help inform the FCA’s approach to disclosures requirements for cryptoassets.”

But at the heart of the FCA's push is this belief: "Clear crypto regulation will improve the integrity of the UK's crypto markets, help protect consumers and support the UK's growth and competitiveness." The sandbox path suggests that regulators want to avoid the rigid, one-size-fits-all approach typical of traditional financial regulation in recognition of the unique structural and technological features of the digital-asset markets.

This is not the first time the FCA has taken steps toward more inclusive, collaborative regulation. London-based exchanges won approval in recent months for retail access to crypto exchange-traded notes (cETNs), offering a regulated entry point for UK investors into a familiar securities-style wrapper for crypto exposure. The FCA already tightened financial-promotion rules for crypto firms, warned against unlicensed exchanges, and published a comprehensive discussion paper that covers topics such as admissions, disclosures, and potential market-abuse risks.

The decision to allow industry-led disclosure design reflects a wider recognition of how crypto markets are fast-evolving-to the extent that tokenization, stablecoins, and DeFi throw up fresh challenges for traditional regulatory templates. The FCA approach sends a signal to be adaptable in harnessing innovation and leveraging industry expertise for frameworks fit for digital-asset markets, not forcing existing old-economy regulatory molds on them.

But some in the industry are already warning that without bold action on stablecoins and tokenization, the UK risks becoming a “flyover zone” for crypto, a jurisdiction which regulates only reluctantly, while others race ahead. That warning emerged during a panel at the City & Financial Global conference at which industry voices urged the UK to decide whether to embrace stablecoins and tokenized deposits if it wants to preserve the pound’s relevance in an increasingly tokenized global capital market.

That critique illustrates the tightrope the FCA faces; strike the right balance between investor protection, market integrity, and enough flexibility to accommodate innovation, all while producing a final regulatory framework by 2026. As the sandbox unfolds, the outcomes that emerge could shape not just disclosure rules but the overall tenor of the UK's approach to digital assets.

The message is loud and clear: for firms operating in the crypto space, and for global investors eyeing the UK, regulatory design is no longer a matter of passive compliance; it's an active process to which early participation could help shape the path forward.