GDF x CCI Response to FCA CP25/15 Prudential Regime for Cryptoasset Firms
GDF and CCI are the two leading global members’ associations representing firms delivering crypto and digital assets solutions. Our members span the digital asset ecosystem and include the leading global crypto exchanges, stablecoin issuers, digital asset Financial Market Infrastructure providers, innovators, and investors operating in the global financial services sector.
We welcome the FCA’s work to develop a tailored prudential regime for cryptoasset firms and support the objective of maintaining financial resilience while enabling innovation. However, the proposed framework risks placing the UK at a competitive disadvantage if requirements materially exceed those of peer jurisdictions such as the EU, Singapore, Hong Kong, and the US. Prudential requirements must be risk-sensitive, proportionate, and internationally aligned to ensure the UK remains an attractive base for high-quality firms.
Our overarching feedback is as follows:
- Ensure International Competitiveness – Prudential requirements must align with global norms (EU, Singapore, Hong Kong, US) to avoid discouraging firms from establishing or maintaining a UK presence.
- Calibrate Capital Requirements Proportionately – Adjust K‑Factors (especially K‑SII and K‑QCS) and the Fixed Overhead Requirement to better reflect actual risks and avoid disproportionate capital burdens.
- Recognise the Real Economic Value of Assets – Permit inclusion of certain intangible assets and firm‑issued tokens in capital where they have demonstrable market value and utility.
- Support Practical Liquidity Management – Allow firms to meet liquid asset requirements in major currencies with appropriate FX haircuts to reflect global treasury practices.