The UK’s Financial Conduct Authority published draft guidance, Consultation Paper CP26/36, on which crypto activities will not need an FCA licence when the UK regime starts on 25 October 2027, including stablecoin payments, apps that only connect a user to another service or a decentralised protocol, trading on your own account and market making, and wants comments by 18 November 2026.

Those exclusions are in the Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026, which the government laid before Parliament on 15 September 2026. They are a draft instrument that Parliament has not yet approved, so CP26/36 is a consultation on draft guidance, not a rule in force.

The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, made in February 2026, bring the new activities in on 25 October 2027. A person who carries one on as a business in the UK needs FCA authorisation unless an exclusion or exemption applies.

What counts as a UK qualifying stablecoin

In the draft guidance, a coin counts as a UK qualifying stablecoin only when an issuer holding FCA permission to issue stablecoins creates it as part of that permitted activity. The same business can also issue stablecoins that fall outside that category. A coin issued outside the permission is not a UK qualifying stablecoin, and an overseas stablecoin is not one either. An exclusion written for the UK coin should not be assumed to cover any other stablecoin.

The FCA says no product can sit in both categories, qualifying stablecoin and electronic money.

Paying with that coin

The Treasury policy note of 21 April 2026 says the government wanted stablecoin payment firms to avoid a dealing and arranging permission in October 2027, while a wider payments reform was still being written.

Under the draft regulations, a business could transfer a UK qualifying stablecoin to another person, or exchange it for money, for another UK qualifying stablecoin or for another asset, without permission to deal as principal, deal as agent or arrange those deals. That includes work tied to the transfer or the exchange. Swapping the coin for any other qualifying cryptoasset, a non-UK stablecoin included, still needs those permissions, and so does a transfer that comes with a right to have the coin returned. The draft guidance treats that right as lending or borrowing.

The draft would take the temporary holding of a UK qualifying stablecoin out of safeguarding while a payment goes through. A payment here is the placing, transfer or withdrawal of funds, and the funds can be the stablecoin. Other cryptoassets, including a stablecoin that is not a UK qualifying one, remain within safeguarding, and dealing is not covered. The FCA expects an order to send the coin on, and it reads “temporarily” as no longer than that order takes.

An app that only connects

The exclusion covers arranging only. The business must not already be FCA-authorised, and it must not be a payment service provider. Its role has to be a technical service that lets a user reach someone else’s service, or a decentralised protocol. The person on the other side has to be carrying on a regulated activity for which they are authorised or exempt, or the user has to be reaching a decentralised protocol. One of those is enough, and both can be true.

“Merely” is the closer fit when the user starts the instruction, picks the service or the protocol, and the app passes the instruction on without judging the route, the terms, or whether the trade goes ahead, and the weaker fit when the app selects, ranks, negotiates or decides. A feature that makes the app more useful does not, on its own, remove the exclusion.

Dealing still needs authorisation, and the business cannot be the service or the protocol it connects people to. If it relies on the other person’s permission, that permission has to match the activity the user is reaching. The match fails if another exclusion already covers the activity, or if the activity happens outside the UK or isn’t run as a business. An authorised firm or a payment service provider cannot use the exclusion. A business that needs no authorisation, because other exclusions already cover the rest of what it does, can.

“Technical service” is undefined. A blockchain does not make a service technical. Open code, automatic settlement and calling something DeFi do not make a protocol decentralised. A service an identifiable person controls is unlikely to qualify only because it uses smart contracts, and a screen in front of something described as decentralised is not enough.

Your own trades, and market making

Dealing as principal would not need permission when the firm is not providing a service to anyone else. The draft’s example is a firm trading its own money, borrowings included, without holding itself out as offering a financial service. Trading against the firm’s users, or executing their orders, is a service to them. The FCA would generally also see a service where the counterparty is a retail investor, where that person pays a fee or commission, where the trade sits in an ongoing arrangement the firm offered, or where the firm holds itself out as a liquidity provider or as offering execution and other dealing services.

Market making on a qualifying cryptoasset trading platform is the other case in the same exclusion. The firm holds itself out as willing and able to buy and sell qualifying cryptoassets admitted to the platform, at prices it sets generally and continuously, rather than trade by trade. Answering requests for quotes can qualify. The platform may be run by an authorised person or by someone who is not. Operating the platform, arranging deals and safeguarding sit outside this exclusion.

Code abroad, people in the UK

Software and a protocol are not persons, so they cannot hold an FCA licence. An automatic function can still be the activity of whoever set its parameters. Writing the code is not, by itself, the regulated activity. If no person is carrying that activity on, there is nothing to authorise, and where several people are involved each one is assessed alone.

People or code in another country do not, by themselves, take an activity out of the UK. People established in the UK who govern, operate, maintain or develop the arrangement may be enough for a UK link. That is the question if you run a platform or a wallet from Panama, or from elsewhere in Latin America, and you have users in the UK.

The months left to apply

Firms that want the new activities can apply from 30 September 2026 to 28 February 2027. A firm the FCA has already authorised may need to vary its permission. A firm registered under regulation 14A of the Money Laundering Regulations can keep providing cryptoasset services until the decision, if it applies in that window and wants the savings provision. The FCA expects to decide before 25 October 2027. The consultation page says a firm that wants the savings has to apply inside the window.

Where uncertainty about the technical services exclusion materially affected a firm’s ability to file a complete application in time, the same page says the FCA will allow extra time to finish the arranging permission, if the rest of the application was complete and filed in the window. It points the firm to the pre-application support service.

Comments close on 18 November 2026, through the online form or by email to cp26-36@fca.org.uk.