Title page 1

Contents 3

Chapter 1. Summary 4

Chapter 2. Cryptoasset Trading Platforms 8

Chapter 3. Cryptoasset Intermediaries 27

Chapter 4. Proposals applying to Cryptoasset Trading Platforms and Intermediaries 42

Chapter 5. Cryptoasset Lending and Cryptoasset Borrowing 49

Chapter 6. Staking 64

Chapter 7. Decentralised Finance 72

Chapter 8. Next Steps 75

Annex 1. Questions in this paper 76

Annex 2. Regulating Cryptoasset Activities Cost Benefit Analysis 79

Annex 3. Compatibility statement 131

Annex 4. Glossary 136

Annex 5. Abbreviations used in this paper 137

Appendix 1. Draft Handbook text 139

Tables 9

Table 1. Comparison of proposals in this CP to original proposals in DP25/1 and, where applicable, CP25/25 9

Table 2. Comparison of proposals in this CP to original proposals in DP25/1 and, where applicable, CP25/25 28

Table 3. Comparison of proposals in this CP to original proposals in DP25/1 50

Table 4. Comparison of proposals in this CP to original proposals in DP25/1 59

Table 5. Comparison of proposals in this CP to original proposals in DP25/1 65

Table 6. Information and key terms that must be provided to retail clients 68

Figures 13

Figure 1. Simplified illustration of potential legal forms for UK‑authorised overseas CATPs (also a UK CATP) 13

Figure 2. Simplified illustrations to show possible scenarios involving UK CATP operators and operation of MPT and principal dealing desks 22

Figure 3. Areas and activities of our cryptoasset regime linked to settlement rules 26

Figure 4. Generally permitted flows of transaction (scenario 1) 35

Figure 5. Generally permitted flows of transaction (scenario 2) 36

Figure 6. Flows of transaction generally not permitted (scenario 1) 36

Figure 7. Flows of transaction generally not permitted (scenario 2) 36

Figure 8. Business model generally not permitted 36

Figure 9. Simple Cryptoasset Lending Model 49

Figure 10. Simple Cryptoasset Borrowing Model 50

Figure 11. Expected regulatory requirements on regulated staking firms with relevance to consumer understanding 66

Annex Figures 82

Figure 1. How the Regulated Activities Order interacts with our wider cryptoasset regime 82

Figure 2. Consumer demand for cryptoassets as a percentage of the adult population (Cryptoasset Consumer Research Series) 84

Figure 3. UK Cryptoasset transactions 84

Figure 4. Where UK consumers purchase cryptoassets 85

Figure 5. Percentage of consumers who keep using the platform they first purchased from and those that moved to another platform 86

Figure 6. Important factors for consumers when choosing a Cryptoasset platform (% share saying it was a consideration in their decision) 86

Figure 7. Mechanism showing how cryptoasset lending and borrowing works 88

Figure 8. Estimated firm population 106