The UK's Financial Conduct Authority (FCA) has floated a proposal that would let retail-focused investment funds allocate up to 10% of their assets to cryptocurrencies — as long as the exposure aligns with stated investment objectives. The suggestion, disclosed in a regulatory update this week, marks the first time the FCA has publicly considered a specific cap for mainstream fund exposure to digital assets.
What the FCA is proposing
Under the plan, a retail fund could hold crypto assets such as bitcoin or ether, but only if the fund's published investment policy explicitly allows it. The 10% ceiling would apply per fund, and the FCA stressed that any allocation must be consistent with the fund's risk profile and disclosures. Funds that stray beyond that limit would face enhanced reporting requirements or potential restrictions.
Why the regulator moved now
The FCA has long warned that crypto assets carry high volatility and consumer protection risks. But the agency also acknowledges growing demand from retail investors for exposure through regulated vehicles. By setting a clear threshold, the FCA hopes to offer a controlled route into crypto without the outright bans seen in some other jurisdictions. The timing — mid-2026 — follows years of internal consultation and a series of market disruptions that highlighted the need for clearer guardrails.
What happens next
The FCA is now seeking feedback from industry participants, asset managers, and consumer groups. A consultation period is expected to run until September 2026, after which the regulator will issue final rules. If adopted, the change would apply to UK-domiciled funds and could reshape how retail investors access crypto through traditional fund products. The next concrete step is a formal response from the FCA to the consultation submissions later this year.
