UK’s FCA Seeks Public Input on Staking, Lending, and DeFi in New Discussion Paper

Crypto Journalist

Amin Ayan

Crypto Journalist

Amin Ayan

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Amin Ayan is a crypto journalist with over four years of experience in the industry. He has contributed to leading publications such as Cryptonews, Investing.com, 99Bitcoins, and 24/7 Wall St. He has...

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May 1, 2025

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The United Kingdom’s Financial Conduct Authority (FCA) is seeking public feedback on key aspects of the crypto industry, including staking, lending, borrowing, intermediaries, and decentralized finance (DeFi).

The request was published Friday in a newly released discussion paper, part of a broader effort to shape the country’s future crypto regulatory framework.

UK Treasury Drafts Crypto Legislation to Expand FCA Oversight

The move follows the U.K. Treasury’s draft legislation announced earlier this week, which aims to bring specific crypto-related activities under the FCA’s oversight.

Once approved, the legislation would expand the FCA’s authority to supervise areas such as crypto exchanges, stablecoin issuance, and DeFi platforms.

“Crypto is a growing industry. Currently largely unregulated, we want to create a crypto regime that gives firms the clarity they need to safely innovate, while delivering appropriate levels of market integrity and consumer protection,” said David Geale, executive director of payments and digital finance at the FCA.

The government’s broader crypto strategy builds on the Financial Services and Markets Act, passed in 2023, which empowered the Treasury to establish new regulations for digital assets.

The U.K. is working to catch up with the European Union, which implemented its Markets in Crypto-Assets (MiCA) framework in 2023.

Meanwhile, the U.S. has eased its approach under President Donald Trump, with the Securities and Exchange Commission dropping lawsuits against several crypto firms.

Finance Minister Rachel Reeves recently reiterated the government’s commitment to fostering a competitive digital asset ecosystem.

Speaking at Innovate Finance’s Global Summit, Reeves emphasized that the upcoming rules are designed to position the U.K. as a hub for crypto innovation and investment.

She also highlighted plans to collaborate with U.S. authorities on responsible digital asset development.

The Treasury is inviting technical comments on the draft legislation until May 25 and plans to release further details on rules addressing market abuse, disclosures, and asset admissions in the coming months.

UK Trade Associations Urge Special Crypto Envoy Appointment

Earlier this year, a coalition of leading UK trade associations called on Prime Minister Keir Starmer’s government to appoint a special envoy for crypto and develop a comprehensive action plan to support the digital assets and blockchain sector.

In a letter addressed to Varun Chandra, Starmer’s special adviser on business and investment, six UK digital economy organizations stressed the need for stronger strategic alignment to unlock investment, growth, and job creation within the crypto industry.

In September, the UK government introduced a new bill aimed at clarifying the status of digital assets, including non-fungible tokens (NFTs), cryptocurrencies, and carbon credits, as “things” and “personal property” under the nation’s property laws.

The UK has been among the countries that have ramped up regulatory efforts following some high-profile bankruptcies last year.

The FCA oversees crypto activities, focusing on anti-money laundering measures and consumer protection.

Last year, the FCA implemented new rules that require crypto firms to register with the financial regulator and have their marketing materials approved by an FCA-authorized firm.

Key updates include exchanges providing clear warnings to customers about the risks associated with crypto investments.