BLINC magazine: keeping crypto in safe hands

With new rules for the FCA’s safeguarding regime due in May 2026, BCB Group looks closely into the implications for crypto payments stakeholders.

As crypto payments become increasingly embedded in the financial infrastructure − from treasury operations to cross-border flows, from institutional trade to global remittance − it’s hardly surprising that the regulators are moving in.

For payments firms operating at the intersection of fiat and digital assets, safeguarding has become the focal point of that scrutiny. In the UK, the Financial Conduct Authority (FCA) is replacing interim post‑Brexit guidance with a far more prescriptive safeguarding regime for payments and e‑money firms.

Announced on 7 August 2025, the new safeguarding rules − in Policy Statement PS25/12 − bring the sector closer to banking‑style controls around client money segregation, reconciliation, audit and resolution planning.

For crypto‑adjacent businesses such as exchanges, payment institutions, stablecoin issuers and the banks that serve them, this is the sign of a structural shift. A broader regulatory consensus that crypto payments infrastructure must meet the same expectations as traditional financial plumbing.

It’s certainly not about regulatory box‑ticking. Safeguarding sits at the heart of trust: confidence that funds are segregated, protected and accessible, even in stressed market conditions.

As part of our Regulatory Radar series tracking regulatory developments shaping the ​payments ecosystem, we’re looking at how firms can navigate these new requirements with confidence.

As the FCA’s safeguarding regime takes shape, our approach offers a practical lens on how firms can move beyond minimum compliance and use safeguarding as a foundation for resilience and growth.

The FCA’s regime explained 

Recent failures across the digital asset sector have reinforced the consequences of weak controls over client money.
Long‑standing vulnerabilities left consumers exposed when firms failed to segregate funds or collapsed into insolvency, and the consequences were stark − between 2018 and 2023, customers recovered on average just 65% of their money.

Regulators, institutions and end‑users can all agree that safeguarding can no longer be treated as an afterthought. While safeguarding obligations are not new, the regulator has been explicit that existing guidance, introduced as a temporary measure following Brexit, no longer reflects the complexity or scale of today’s payments landscape.

These reforms strengthen control through a “Supplementary Regime” that aligns safeguarding closer to Client Assets Sourcebook (CASS) rules. Consequently, firms are duty-bound to upgrade systems, governance and oversight, to comply with new rules
effective in May 2026.

Essentially, the new regime exists to ensure customer money remains intact and recoverable if a firm fails, by holding it in secure accounts, and maintaining robust reconciliation and audit processes. It’s also there to make certain there is more governance an documentation in order to be able to return funds to clients faster.

The objective is not merely procedural. The FCA has been clear in consultation papers that safeguarding is for the benefit of all
stakeholders; it’s intended to protect customers, strengthen operational resilience and reduce systemic risk.

The shift from principles‑based guidance to rules‑based requirements shows that lessons have been learned from historic insolvencies and recent market disruptions. Importantly, the regime aligns payment regulations more closely with existing financial services standards applicable to banks and investment firms.

In traditional finance, segregation, reconciliation and audit are assumed. The FCA’s approach recognises that payments firms increasingly perform functions economically equivalent to banks, custodians and settlement agents − and should therefore be held to comparable expectations.

The message for firms operating across fiat and crypto rails is clear. They must demonstrate that client money is always protected, regardless of asset class, geography or market conditions.

Safeguarding as a discipline not a slogan 

At an operational level, effective safeguarding rests on three foundations: clear segregation, continuous monitoring and reconciliation, and using evidence rather than relying on assumptions.

At BCB Group, that responsibility sits with our Safeguarding Director, Chizoba Uzowuru, whose background spans regulated financial environments where client asset protection is non‑negotiable.

For Uzowuru, safeguarding starts with a simple principle. “Safeguarding, at its simplest, means client money stays client money, always. We ring‑fence it, track it, and return it on demand.”

“In traditional finance, this discipline is assumed. In digital assets, trust still has to be earned. Safeguarding is how we do that. It’s not a policy on a shelf; it’s a daily practice that protects our clients’ working capital, liquidity plans, and reputation.” Early engagement was crucial. As soon as the consultation was published, we tested processes, identified gaps and prioritised potential enhancements.

“Waiting until 2026 wasn’t good enough,” Uzowuru says, “Expectations are high. We wanted to show we could meet those rules, not scramble for compliance when they land.”

BCB Group is already positioned for this future, undertaking independent annual safeguarding audits and drawing on leadership with deep CASS expertise.

We’ve engaged with our third‑party reconciliation provider to enhance record‑keeping and reporting,” Uzowuru explains.

“That way, when the policy is finalised, we can integrate the additional requirements seamlessly.”

Product design, jurisdictional expansion and banking partnerships at BCB all involve safeguarding input from the outset − and this has been crucial to the institutional adoption of our BLINC instant settlement network.

“Safeguarding is part of how we build, how we assess jurisdictions, and how we protect client money across our global network,” Uzowuru notes.

At BCB Group, we have long argued that payments for crypto institutions will only scale if they adopt institutional standards from the outset. As the FCA pushes the industry to show evidence of controls rather than merely intentions, Uzowuru sees the regime as overdue.

“It’s a shift from ‘tell me your balance sheet strength’ to ‘show me your controls’,” she says. “Frankly, this is overdue in parts of the market. Clients deserve proper protection.”

Global standards and BCB’s approach 

BCB’s operating model reflects a clear belief that the highest regulatory standard should apply everywhere, not only where it is mandated.

As the FCA raises the bar in the UK, BCB − authorised in the UK, France, and Switzerland − is extending those safeguarding
principles across its global operations. This consistency matters. Clients operate across jurisdictions, currencies and time zones.
Applying UK‑style safeguarding globally not only ensures that client protections do not depend on location, it also simplifies governance and oversight for institutional clients managing risk across multiple entities.BCB’s engagement with banking
partners illustrates this approach.
We proactively request evidence of safeguarding alignment from counterparties and test controls, rather than relying on contractual assurances. As Uzowuru notes, “We’re proactively asking our banking partners for evidence to support their alignment with our safeguarding standards.”
By treating safeguarding as a global baseline rather than a local obligation, BCB positions itself as a consistent, dependable partner for clients navigating an increasingly complex regulatory environment.

Industry perspectives 

While implementation challenges remain − particularly for smaller firms − there is a broad agreement that clearer, rule‑based safeguarding enhances confidence in the market.

The direction the FCA has taken with its safeguarding regime has been reinforced by industry working groups, trade associations and consultation responses across the payments sector.

The feedback from industry has focused on practical considerations. The principal areas sit around implementation timelines, definitions that reflect 24/7 operations, and alignment between UK and EU frameworks.

BCB has actively contributed to this dialogue, advocating for realistic transition periods and regulatory coherence to avoid unnecessary fragmentation. And this oversight is not limited to traditional currencies. The emergenceof similar safeguards under
MiCA underscores a wider trend.

As Uzowuru observes, “You can see convergence: same risk, same regulation. That’s healthy. It levels the playing field and rewards firms that do the work, not just make promises.”“This is a shift from ‘tell me your balance sheet strength’ to ‘show me your controls’.”

While the UK’s FCA does not cover crypto, the MiCA regulation does.In anticipation, BCB Group has progressed its MiCA licence application to ensure readiness for the next phase of compliance.

Collective engagement between regulators and the industry is helping to translate safeguarding from principle into practice, and to embed it as a shared expectation rather than a competitive disadvantage.

Why safeguarding enhances security 

Safeguarding is often framed as compliance, but it’s not an isolated process or a silo. It’s a risk‑management tool that must be embedded into the culture of an entire organisation.

It impacts those involved across areas as diverse as liquidity planning, treasury governance, vendor oversight, business continuity, cyber resilience and operational controls.

“When you operate in regulated digital finance, there is no “someone else’s department.” Risk lives everywhere, and we all own it,” Uzowuru adds. “We work hand in hand with finance, compliance, legal and operations.
Everyone understands that protecting client funds is core to who we are.”

While segregation reduces counterparty exposure, reconciliations catch errors before they escalate and resolution planning ensures continuity under stress. For clients, these controls translate into fewer surprises.

Funds are protected from operational failures, insolvency scenarios and governance lapses. As Uzowuru says: “We prefer
moments of caution over moments of regret.” By embedding safeguarding into daily operations, firms strengthen both security and reliability − outcomes that benefit clients long before regulators intervene.

Outlook

As with any major change, the transition may not be entirely frictionless, and the FCA’s safeguarding regime is unlikely
to be the final word. For firms operating across borders, safeguarding cannot be viewed in isolation from wider
regulatory developments.

Europe’s MiCA regime, UK FCA rules and global standards are moving broadly in the same direction. However, differences remain, and maintaining consistency without sacrificing competitiveness can be a difficult balancing act.

“The FCA wants to promote innovation and support UK businesses. But they also need to ensure the rules don’t push firms to relocate to jurisdictions with more flexible frameworks,” Uzowuru adds.

For institutional clients, alignment across jurisdictions is increasingly valuable. It reduces friction, simplifies due diligence and reinforces trust. Additionally, as digital assets mature, safeguarding is shifting from a compliance obligation to a market of quality. Institutional clients are no longer satisfied with assurances; they expect proof.

Uzowuru is unequivocal: “Safeguarding will move from being a compliance requirement to a defining competitive differentiator.”

Firms that invest early in robust frameworks, transparent reporting and operational discipline will findthemselves better positioned as regulation tightens.

Meanwhile, those that treat safeguarding as paperwork risk being left behind, constrained by infrastructure, capital or credibility gaps.

 The final word

Safeguarding is not a tagline; it’s a discipline. As the FCA’s regime comes into force, it will reshape expectations​across payments: raising standards, protecting clients and reinforcing trust.

Ultimately, regulatory alignment and commercial growth are not battling for supremacy; they complement each other.

BCB strives to ensure client protection without waiting for regulation, setting a payments sector benchmark. This also ensures
networks such as BLINC can scale sustainably without compromising client protection.

With independent annual audits, daily reconciliations, and strong governance, we’re showing that safeguarding measures need to be essential practices and not compliance exercises.

Safeguarding at BCB Group means embedding trust into every client relationship. As Uzowuru says:

“Safeguarding gives clients certainty. It allows them to scale, trade confidently, move capital across markets, and meet their own obligations.”

In a rapidly evolving digital asset ecosystem, where trust must be earned daily, safeguarding is how serious operators lead the way.

What safeguarding means for clients 

While regulatory detail can sometimes feel abstract, the implications of safeguarding can clearly be seen for different client groups using payments infrastructure.

Crypto natives 

For crypto – native firms such as exchanges, payment processors and liquidity providers, safeguarding provides reassurance that operational growth does not introduce hidden risks.

By segregating accounts, reconciling daily and monitoring in real time, crypto clients can minimise exposure to internal errors, third‑party failures or liquidity shocks.

BCB Group’s BLINC network enables 24/7/365 settlement and ensures seamless, secure transactions across jurisdictions and asset classes.

Funds don’t linger in trading accounts; they pass through straight to settlement and return to safeguarded accounts, express-train style.

Remittance firms

Cross‑border payments rely on trust. Enhanced safeguarding strengthens confidence that funds will not be trapped, delayed or misallocated as they move across jurisdictions.

For remittance providers operating on thin margins and high volumes, operational resilience is inseparable from client protection.

Treasury departments
Corporate treasuries using crypto for settlement or liquidity management need certainty of access.Safeguarding ensures that funds remain available on demand, supporting cash‑flow planning and working capital management.

As Uzowuru observes, “Our clients run high‑velocity businesses. They can’t hesitate because they’re wondering whether funds will be there.”

Family offices and hedge funds

For allocators, safeguarding is a prerequisite for exposure. Family offices exploring crypto payments and hedge funds trading digital assets require infrastructure that mirrors global regulatory standards.

Robust safeguarding reduces counterparty risk and supports due diligence, thus enabling firms to align their digital asset activity with fiduciary obligations.

BCB Group’s regulated status across multiple jurisdictions, combined with independent safeguarding audits, ensures that client funds are protected in line with international expectations.

Institutional capital markets participants

Banks, brokers and custodians entering payments expect the same kind of rigorous standards they rely on in traditional finance.

Safeguarding reassures institutional investors that payments and settlements for digital assets firms meet the standards they rely on in capital markets.

The use of independent audits, formal resolution packs and transparent reporting aligns with established financial safeguards and supports internal governance.

The key elements include 
• Clear segregation of client funds from a firm’s own money, held in designated safeguarding accounts at regulated credit institutions
• Daily or frequent reconciliations to ensure records match actual balances
•  Enhanced record-keeping and reporting, including monthly safeguarding returns
•  Independent annual audits for larger firms
• Resolution packs to ensure client money can be returned to clients swiftly in the event of insolvency.