UK's FCA consults on DeFi rules ahead of 2027 crypto regime

Britain's Financial Conduct Authority opened two consultations on October 21, 2026 that set out how firms using decentralized finance must meet its existing rules. The move is a first step toward bringing crypto inside UK regulation from October 2027. Comments close November 18.

The two papers, GC26/7 and CP26/36, sit on the FCA's own website. The first is draft guidance on operational resilience and financial crime for firms that touch DeFi. The second maps which activities fall outside the regulated line. Both are consultations, not rules.

What the FCA actually proposed

GC26/7 is what the FCA calls non-Handbook guidance. It does not create a new DeFi rulebook. Instead it offers observations on risk and illustrative examples of steps a firm might take. The guidance is aimed at authorized firms that fall under SYSC 15A on operational resilience, SYSC 6 on compliance and financial crime, and the Money Laundering Regulations.

CP26/36 runs alongside it. That paper sets out new legislative exclusions from the regulated perimeter, the line between what the FCA oversees and what it leaves alone. Read together, the two documents try to tell firms where DeFi work sits before the bigger regime lands.

The timing is deliberate. From October 25, 2027, the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 will pull new crypto activities inside the FCA's remit. The regulator says it plans to publish the final DeFi guidance in January 2027, well before that date.

What the guidance asks of firms

For a regulated firm, the draft reads less like a ban and more like a checklist. It wants firms to understand the DeFi protocols they rely on, keep services running when one breaks, and screen for dirty money under the same rules that cover the rest of finance. Much of this touches self-custody, where no middleman holds the keys. None of it is new law. It is the FCA saying the old rules still apply when the plumbing is a smart contract.

There is a catch. A separate strand of the FCA's thinking, flagged in earlier proposals, would require UK platforms to route customer orders only through authorized venues. Critics read that as a wall between British users and open DeFi apps run from abroad. The FCA has not settled this point.

Why the industry is pushing back

Not everyone buys the FCA's framing. Katie Harries, head of policy for Europe at Coinbase, said the country faces a basic choice. "The UK must decide if DeFi will develop through regulated gateways or remain constrained to a silo," Harries said, in comments reported by Gokhshtein Media on October 25. She has called earlier versions of the plan a de facto ban on platforms offering DeFi access.

Her worry is competitive. US regulators recently closed their own comment window on a sweeping crypto proposal, and have moved to let regulated firms plug into DeFi for tokenized assets. A UK that fences it off could lose builders to friendlier places. That is the industry case. Whether the final guidance is that strict is still unknown.

Supporters of the FCA would point the other way. A clear rulebook, even a cautious one, beats the limbo UK crypto firms have worked in for years. A consultation is how that clarity gets built. The real number to watch is not a price. It is how many firms file objections before November 18.

What to watch

Three dates frame what comes next. Comments on both papers are due by November 18, 2026. The FCA aims to publish final DeFi guidance in January 2027. The full regime starts October 25, 2027. Between now and then, the fight is over how far the perimeter reaches, and whether a London app can still hand users a door to DeFi.