FCA Annual Work Programme 2025/26: The Crypto Market Impact

While the crypto market is often defined by its global sentiment, like bull runs, corrections, and media coverage, the major regulating bodies like the FCA play a surprisingly influential role.

In March earlier this year, the Financial Conduct Authority outlined a broad five-year strategy. Being the primary regulator in a nation that relies on its financial services industry, its responsibility is to now oversee the conduct of almost 50,000 firms. 

A month later, in early April, the FCA announced the Annual Work Programme 2025/26. The programme is a reiteration of its goal to support growth within a safe environment. Crypto featured a few times in this report, though due to its growth by the FCA over time, even the broad-stroke policies now impact the crypto market.

Priorities of the FCA's 2025/26 work programme

The 2025/26 agenda is built on four strategic priorities. These are for the FCA to become a “smarter regulator”, support growth actively, help customers, and fight crime. This first point is what stands out the most in the 5-year plan—the intention is to use technology and reliability to become a more predictable regulator. One example is to digitise the way firms authorise themselves, and perhaps to make fewer changes to these processes going forward. This may refer to crypto in particular, which has experienced constant regulatory changes over the past few years due to its infancy.

The £7.8 million cryptoasset allocation

One of the more concrete elements of the FCA's agenda is to invest £7.8 million towards "developing and implementing a proportionate and safe regulatory regime for crypto activities in the UK, promoting a competitive and innovative sector”. Of all the “Exceptional Projects”, this one has the second highest budget, highlighting that crypto is taking up more focus and resources of the FCA.

This figure, which is categorised under "Cryptoasset Stablecoins," is an indication that the FCA is giving space to the potential of stablecoins to prove their value, perhaps regarding their interaction with traditional payment systems, due to price stability. 

Industry observers expect a risk-based framework that may differentiate between various cryptoassets and their activities to avoid stifling innovation. The goal of incubating a "competitive and innovative sector" shows that the FCA is walking a tightrope between attracting founders to join the UK market while also heavily policing it.

Ultimately, the emphasis on "proportionate" gives us a clue that a one-size-fits-all approach is no longer suitable for the diverse crypto landscape, particularly given its reference to the “Wider Regime” of crypto.

Initiatives in the work programme 

Within the outlined programme, there is a statement on extending PASS, which is the Pre-application Support Service, to include payments and crypto firms. 

PASS is an arm of the FCA that provides early-stage guidance, particularly with the authorisation process. Before this announcement, it was only available to limited companies, like overseas wholesalers looking to expand into the UK. This is a clear attempt to streamline authorisation, and it will particularly help well-prepared crypto projects by lowering the barriers to entry and improving support.

Another “Exceptional Project” within the programme was how cryptoassets are presented to consumers. The FCA has claimed they will return up to £1m in fees for promotions work within crypto, which they hadn’t used as expected. 

This may imply a refinement in scope, but it doesn't particularly signal a loosening of the existing rules, which are relatively stringent in how cryptoassets can be marketed in the UK. Fighting financial crime, which is arguably the core FCA priority, will likely extend its reach deeper into the crypto sector. Enhanced collaboration with the FCA in this regard can be expected.

Finally, £1.2 million has been allocated to Open Banking and Open Finance. With frequent mentions of long-term thinking and innovation within Open Banking, it’s an interesting area to monitor in regards to whether it will shift towards crypto inclusion or pull further away as crypto’s clear competitor for our open financial future.

Potential impacts for the UK crypto market

The agenda outlined in the 2025/26 has good optics for the UK crypto market, which is well needed given the FPC’s warnings since. Starting with refunding £1 million in unspent fee money, the FCA is leading by example and establishing fairness within the environment that it’s trying to regulate. The money itself will not have a large impact on the broader crypto market, except to help build the FCA’s own reputation and further signal that the UK is an attractive place to start a crypto project.

The £7.8 million investment into forward-looking cryptoasset regulation is clearly not just about developing new rules, but again acts as a signal that the space is well-funded and active. The money will likely be spent on hiring personnel and improving their ability to reduce scams, as well as establishing a clearer plan for stablecoins. 

However, it’s clear that crypto is no longer viewed as a separate job of the FCA from traditional finance, but is more frequently mentioned within the bulk of its broad policy literature. This regulatory cohesion means that those broader policies, like its core goal of becoming a “smarter regulator”, will have an impact on crypto. In this instance, authorisation will be faster, while PASS support will now extend to crypto projects too.

This is good news for crypto, but the FCA wants something in return. The onus will be increasingly on crypto firms to help collaborate and fight financial crime. This involves active engagement in sharing data with both domestic and international partners.

A pivotal year for UK crypto regulation

This year, the FCA's Annual Work Programme was a clear reiteration that the UK’s crypto market is becoming safer, with greater resources behind it, and potentially finding some more consistency, particularly in having faster authorisation and better support. However, should you want an authorised company to help toe the line with the FCA’s tough crypto promotional rules, please contact Englebert, who can provide guidance and training for crypto marketing.