FCA Consults on Exclusions That Would Let Many UK Stablecoin Payment Activities Run Without Crypto Permissions

Draft perimeter guidance in CP26/36 explains new exclusions for UK qualifying stablecoins held temporarily for payments, and for dealing and arranging. Overseas stablecoins do not benefit. Comments close 18 November 2026, ahead of the regime's 25 October 2027 start.

FCA Consults on Exclusions That Would Let Many UK Stablecoin Payment Activities Run Without Crypto Permissions — editorial cover artwork
FCA Consults on Exclusions That Would Let Many UK Stablecoin Payment Activities Run Without Crypto Permissions — editorial cover artwork

By Elena Marsh, Journalist, Stablecoins

The Financial Conduct Authority (FCA) has opened consultation CP26/36, draft perimeter guidance explaining how new exclusions in the UK's cryptoasset legislation apply, including several that cover payments made with stablecoins. The consultation was published on 21 October 2026 and comments are due by 18 November 2026. The FCA says it will publish final guidance in spring 2027. The new cryptoasset regime begins on 25 October 2027.

The guidance is a draft. It sets out the FCA's view of exclusions in the FSMA 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026, a second statutory instrument the Government laid the day before the FCA published its earlier perimeter guidance, PS26/18, in September 2026.

A new sub-type: the UK qualifying stablecoin

The amendment regulations create a distinct sub-type of qualifying stablecoin, the "UK qualifying stablecoin". It is a qualifying stablecoin issued within the scope of article 9M (issuing qualifying stablecoin) by a firm with Part 4A permission for that activity. The FCA stresses that several of the new exclusions apply only to UK qualifying stablecoins, and that firms "should not assume" an exclusion available for a UK qualifying stablecoin also covers other qualifying stablecoins, "such as overseas stablecoins".

What payment firms may not need permission for

Three exclusions matter most for payments.

  • Temporary holding for a payment. Article 9QA excludes UK qualifying stablecoins held temporarily in connection with executing a payment transaction from the article 9N safeguarding activity. In the FCA's view, the stablecoin "should be accompanied by an order for onward transfer", and "temporarily" is likely to mean it is not held for longer than necessary to execute that order. The FCA adds that a payment service provider receiving a UK qualifying stablecoin as a fee is unlikely to be carrying on article 9N activity. The exclusion does not extend to other cryptoassets, including qualifying stablecoins that are not UK qualifying stablecoins.
  • Dealing and arranging. Under article 9Z10A(1), "many payment-related activities involving UK qualifying stablecoins will not require permission" for dealing in or arranging deals in qualifying cryptoassets. The exclusion does not apply where the stablecoin is subject to a right of return, so it is not available for cryptoasset lending or borrowing.
  • Backing assets. Articles 9QB and 43A exclude backing assets held to maintain the stable value of a UK qualifying stablecoin from the safeguarding activities. The FCA notes this does not remove the need to meet its safeguarding rules for those assets, such as those that commence at CASS 16 from 25 October 2027.

E-money or stablecoin, and promotions

The draft also explains how to tell a qualifying stablecoin from electronic money. The legislation means a product cannot be both, and the FCA says the answer depends on a case-by-case assessment of its characteristics.

On financial promotions, the amendment regulations make issuing qualifying stablecoins a controlled activity and qualifying stablecoins a controlled investment in their own right. They also add exemptions for communications that mirror the dealing and arranging exclusions.

Why it matters

For payment firms and stablecoin issuers, the draft narrows a key question: which stablecoin payment flows need cryptoasset permissions, and which do not. Because the relief is tied to stablecoins issued under article 9M by FCA-authorised firms, overseas tokens used in the same payment flows would not get it. Firms planning to rely on the savings provisions need to apply in the FCA's application window, which opened on 30 September 2026 and closes on 28 February 2027.

Sources

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