The UK's Financial Conduct Authority wants to let retail investment funds put up to 10% of their assets into crypto. The proposal, published Tuesday, is the regulator's most concrete step yet toward integrating digital assets into mainstream finance without blowing past investor-protection guardrails.
The 10% ceiling
Under the plan, funds marketed to everyday investors could allocate no more than a tenth of their portfolio to crypto assets. The FCA says the cap is meant to contain potential losses from a volatile market while still giving fund managers room to experiment with the asset class. The proposal would apply to a range of retail-focused funds, including unit trusts and open-ended investment companies.
Why the FCA moved now
British regulators have spent the past two years studying how crypto fits into existing investment rules. The Treasury gave the FCA a formal remit to consult on crypto fund access last year, and today's proposal is the result. The authority says it's trying to balance market innovation with investor protection — a line it's walked carefully since the collapse of FTX in 2022 and the subsequent regulatory overhaul across Europe and Asia.
The timing isn't accidental. The European Union's Markets in Crypto-Assets regulation, known as MiCA, came into full force earlier this year, and the UK has been racing to keep its own rules competitive without copying Brussels exactly. Allowing retail fund exposure — even capped — signals London wants to stay in the game.
What the cap covers
The 10% limit applies to direct holdings of crypto assets like Bitcoin and Ether, as well as investments in crypto-linked exchange-traded products and funds that themselves hold crypto. The FCA specifically excluded assets that are tokenised versions of traditional securities, which already fall under existing rules. That distinction matters: the regulator is drawing a line between crypto as a new asset class and tokenisation as a new wrapper for old assets.
What comes next
The FCA is opening a consultation period that runs through mid-September. Industry participants — fund managers, custodians, consumer groups — will submit comments before the regulator finalises the rule. The authority hasn't said when the final version would take effect, but the consultation timeline suggests a decision before the end of 2026. For now, fund managers can start preparing, but they can't yet take a single pound of retail money into crypto.
