The UK Financial Conduct Authority (FCA) has published consultation paper CP25/15 on its proposed prudential regime for cryptoasset firms, also accompanied by an updated webpage. This is intended to be read together with CP25/14 on stablecoin issuance and cryptoasset custody, which we discuss here. In this consultation paper, the FCA has proposed prudential rules and guidance for cryptoasset firms, including those issuing qualifying stablecoins and safeguarding qualifying cryptoassets, including stablecoins. The proposals introduce a new prudential regime to be integrated through two new sourcebooks: (i) COREPRU which will initially apply to firms carrying on regulated cryptoasset activities; and (ii) CRYPTOPRU, which will contain other sector-specific requirements for firms doing regulated cryptoasset activities, with these firms referred to as CRYPTOPRU firms.
The FCA has set out proposals which cover the following areas:
- The definition and composition of capital for own funds, including the classification of capital into tiers and their associated requirements, prior FCA permissions required and how to calculate the types of own funds held to meet capital requirements.
- Own fund requirements, to comprise of a fixed overheads requirement, a permanent minimum capital requirement for issuers of qualifying stablecoin and qualifying cryptoasset custodians, and a K-factor requirement based on firm-specific activity or exposure.
- Liquid assets requirement, setting out the minimum liquidity requirements for CRYPTOPRU firms and the type of assets the firm can hold to meet them.
- Concentration risk, including expectations for monitoring and managing exposure to counterparties and asset classes.
The deadline for comments to the consultation paper is 31 July. The FCA also has plans to publish further consultations in 2025 and Q1 2026 in line with its roadmap for crypto regulation.
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