Regulation· ★★★★· bearish·

UK FCA to regulate DeFi by function, not technology, ahead of 2027 regime

  • —FCA: automation, smart contracts and distributed ledgers do not by themselves exempt an activity from licensing
  • —Requirements are set by the functions an activity performs, not by whether a protocol is centralized
  • —Consultations close on 18 November 2026; full regime starts October 2027
  • —Scope covers platforms, trading, custody, staking and stablecoin issuance
Why it matters: DeFi protocols performing real financial functions could face licensing on par with traditional platforms, potentially forcing geo-blocking of UK users.
Source: Cryptodnes
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