The UK is rewriting regulatory standards for the global digital asset industry by significantly expanding the scope of virtual asset custody regulations. As policies are designed to extend regulation beyond simple storage services to include platforms and apps, analysts suggest that structural changes across the entire industry have become inevitable.
The UK Financial Conduct Authority (FCA) announced plans to broaden the definition of crypto custody to include all platforms and applications that hold customer assets for more than 24 hours under regulation. As a result, it is increasingly likely that not only exchanges but also wallet services, DeFi interfaces, and some fintech apps will fall under regulatory influence.
In particular, the key aspect of this reorganization is that it goes beyond a simple expansion of scope to a transition to role-based regulation. With validators, node operators, and stablecoin issuers now subject to the new standards, a structure is being established that incorporates all network participants into the supervisory framework.
UK authorities plan to introduce a formal licensing system based on these standards starting in 2026. This is interpreted as a move away from existing partial regulations and the full application of licensing models to the digital asset industry, similar to those used for banking and securities.
This measure aligns with global regulatory trends. As major countries, such as the European Union with the MiCA and the U.S. discussing market structure legislation, move to incorporate digital assets into the institutional framework, the UK appears to be refining its regulations around the core pillar of 'custodial responsibility.'
The industry views this policy as a double-edged sword. While it could strengthen investor protection and the foundation for institutional capital inflows, concerns are also being raised that the regulatory burden on decentralized services could increase sharply. In particular, if DeFi protocols or non-custodial services are effectively subject to regulation, there is talk that the pace of innovation in the industry could slow down.
Ultimately, the UK's recent decision is interpreted not merely as a tightening of regulations, but as an attempt to redefine 'who bears responsibility.' As the concept of custody expands, the digital asset market is increasingly likely to converge into a structure more similar to traditional finance. This is expected to serve as a signal that competition for regulatory standards in the global market will begin in earnest in the future.
