HM Treasury has recently unveiled the final draft of the Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026, aimed at refining the UK’s upcoming crypto regulatory framework for UK qualifying stablecoin payments. The draft instrument, presented to Parliament on Sept. 15, proposes the elimination of qualifying transfers from the rules for dealing as principal, dealing as agent, and arranging deals. However, it is important to note that this regulation has not been enacted and is not yet in force.
Unlike a blanket exemption for sterling stablecoins, the relief provided by the draft is more specific. A UK qualifying stablecoin must be issued through the regulated article 9M activity by a firm holding the relevant permission. Tokens issued overseas or coins that simply track sterling would not automatically qualify under this criteria.
Under this draft, sending a UK qualifying stablecoin to another individual may fall outside the dealer perimeter. Similarly, exchanging it for money or a different UK qualifying stablecoin could also be exempted. However, if the transaction resembles financing or crypto trading, the boundary changes. If the recipient has the right or obligation to return the stablecoin at a later stage, the transfer may not receive the basic exclusion, potentially leading to regulation under ordinary lending or borrowing activities. Swapping the stablecoin for another qualifying cryptoasset, such as Bitcoin, would also remain outside the payment carve-out.
The final text introduces a separate wholesale-style exception for certain title-transfer collateral and repo arrangements involving qualifying stablecoins. This exception would apply when the original holder is neither a consumer nor a person specified by the Financial Conduct Authority.
Furthermore, a new safeguarding provision outlined in the draft would exclude temporary holding of a UK qualifying stablecoin when it is linked to executing a payment. However, longer-term custody, like maintaining a customer wallet, would not fall under this payment exception and would still be considered part of safeguarding activities.
The financial-promotion rules, which govern marketing, align closely with the exclusions related to transfer, exchange, collateral, and repo activities. It is important to note that these rules are not identical, and arrangements requiring the stablecoin to be returned may not qualify for the basic promotion exemption.
The amendments related to dealing, arranging, and financial promotion are set to come into effect on Oct. 25, 2027, coinciding with the launch of the new regulatory regime for crypto firms by the Financial Conduct Authority. Any amendments made through regulation 4 would take effect after the instrument is approved by Parliament. Additionally, HM Treasury’s separate payments reform is expected to define the long-term regulations for stablecoins used in payments.
Overall, the draft regulations aim to provide clarity and structure to the rapidly evolving crypto landscape in the UK, ensuring a balance between innovation and consumer protection.