The UK’s financial regulator has unveiled the final framework for its new jurisdiction over cryptoassets after easing capital and disclosure requirements for the industry.

The Financial Conduct Authority (FCA)’s framework brings cryptoassets, including floating currencies such as Bitcoin and stablecoins including Tether, into its remit. The legislation will require firms supporting people to buy, sell and hold these assets to meet financial resilience requirements, including capital holdings and stress tests, and be subject to new rules regarding insider trading and market manipulation.

However, the rules are significantly weaker than those in the body’s initial proposal. Stablecoin issuers will only be required to hold capital equal to 1 per cent of the total value of stablecoins they issue, half the initial proposed amount.

David Geale, FCA executive director for payments and digital finance, told journalists: “The feedback we got [was] that we’re starting a bit high.”

In addition, certain public disclosure requirements included in previous drafts have been removed, and crypto firms will be able to determine their own levels of capital risk and conduct self-designed stress tests. This differs from banks in the UK that are required to complete scenarios provided by the Bank of England.

“This is a significant moment for crypto regulation in the UK,” Geale said in a statement. “We’ve created a framework that doesn’t force firms to choose between regulatory certainty and room to innovate; this regime means they can have both in a stable, competitive home to build and grow.

“For consumers, it means firms will be held to similar standards to other financial providers, though we can’t regulate away risk.”

Under the current Labour government, the FCA and other major financial regulators in the country have been under pressure to reduce regulation in financial markets in pursuit of higher growth.

The move has elicited positive reactions from industry figures. Michael McCormick, financial services managing consultant at business advisory firm RSM UK, commented that “The FCA has held the line on the core regulatory framework but made sensible concessions where the consultation risked being too rigid.

“The final rules are still demanding, particularly on safeguarding, disclosures, market abuse and Consumer Duty, but they are more operationally realistic. For crypto firms, this is no longer a question of watching the regime develop, the authorisation race has effectively started.”

He added that in comparison to the EU's crypto regulation regime, MiCA, the FCA had moved later but used that time to refine its regime to better reflect how crypto markets operate.

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