The United Kingdom’s planned crypto regime could effectively prevent regulated financial firms from giving customers access to decentralized finance (DeFi), according to Katie Harries, Coinbase’s head of policy for Europe. She argues that the approach would weaken consumer oversight and threaten the country’s ambition to become a global digital-asset hub.
FCA rules raise access concerns
DeFi refers to software-based financial services that allow users to borrow, lend or trade directly with one another, without depending on a conventional intermediary such as a bank or broker. Transactions are generally carried out through decentralized protocols and exchanges, rather than through a company operating a centralized venue.
According to Cointelegraph, Harries says the United Kingdom is approaching an important decision over whether DeFi should be accessible through regulated platforms or remain largely separate from the regulated financial system. The issue reaches beyond crypto users, she argues, because it could affect the future structure of capital markets, the competitiveness of the City of London and the development of financial infrastructure that operates on blockchain networks.
The Financial Conduct Authority’s proposed crypto rules would require regulated platforms to ensure that customer orders are executed only on an FCA-authorized venue. The stated purpose is to prevent overseas businesses from illegally targeting UK customers. However, Harries says the requirement could also block access to decentralized protocols because many of those systems do not have a legal entity or identifiable operator capable of obtaining authorization.
The proposals do not expressly state that regulated firms are forbidden from integrating DeFi services. Harries’ concern is that the FCA intends to apply the same framework used for fully centralized trading, without creating rules specifically tailored to decentralized products. In practice, she argues, that could amount to a ban by implication.
Authorization deadline approaches
The UK has established its first comprehensive rulebook for crypto regulation. From Oct. 25, 2027, firms providing crypto services to UK customers will need authorization from the FCA. The regulator is consulting on how its requirements should apply to financial services that use or interact with DeFi.
The source material also identifies an October 2027 point at which regulated platforms may no longer be able to provide customers with DeFi access unless the FCA changes its approach. The timing gives the regulator and government an opportunity to clarify how decentralized services can be offered while maintaining consumer safeguards.
There are several reasons regulators may be cautious. Customers using a familiar, regulated platform might not understand when they have moved into a service with different protections. Companies could potentially use DeFi integrations to avoid obligations that apply to conventional financial services. The technology may also create financial-crime and market-resilience concerns.
Harries says those risks call for disclosures, controls and clearly assigned responsibilities rather than complete exclusion. A regulated platform could tell customers when they are leaving a regulated environment and obtain their consent. It could also select which protocols are made available, examine their operational and governance risks, and provide regulators with information about incidents and usage.
Europe and US take different route
Harries points to developments in other jurisdictions as evidence that traditional finance and DeFi do not necessarily have to remain separate. The European Securities and Markets Authority has proposed allowing regulated firms to provide DeFi access in a regulated and transparent setting. In the United States, the Securities and Exchange Commission granted an “Innovation Exemption” in September for peer-to-peer trading of tokenized stocks using automated trading systems and liquidity pools.
These initiatives do not remove the risks associated with decentralized finance, but they reflect an effort to examine how regulated institutions and blockchain-based infrastructure might operate together. Harries says the UK should pursue the same question before its rules make that route unavailable.
She compares the proposed challenge with existing financial platforms that offer customers access to products carrying different levels of regulatory protection. Retail trading platforms and so-called super apps may provide access to stocks, money market funds, commodities and foreign exchange, provided they explain which protections apply to each product or service.
In her view, DeFi should be approached in a similar way: regulate the gateway through which customers enter, rather than trying to impose centralized rules on technology that may not have a centralized operator.
Moneyiar market picture
Moneyiar data at 23:13 on Oct. 22, 2026, showed the following prices and performance:
- Polygon (prev. MATIC), now listed as POL, was $0.0901222046, down 5.05% over 24 hours and 5.64% over seven days.
- Comedian (BAN) was $0.0572840922, down 3.63% over 24 hours but up 6.58% over seven days.
- BAS was $0.0163708451, down 10.04% over 24 hours and 19.39% over seven days.
Why the gateway debate matters
DeFi can already be accessed directly through open-source and decentralized routes, without a regulated intermediary. The central policy question, therefore, is whether customers should also be able to use a regulated gateway that provides disclosures, screening and a clearer line of responsibility.
Harries argues that excluding regulated firms would not remove DeFi from the market. Instead, activity could move further beyond the FCA’s practical visibility, leaving regulated businesses with less ability to influence how customers use the technology. It could also reduce the incentive for UK firms to invest in tokenized markets and other blockchain-based financial services.
The broader argument is that onchain finance may depend on systems capable of operating continuously and across borders, while reducing reliance on multiple intermediaries. If UK rules prevent domestic firms from connecting customers to decentralized infrastructure, Harries says innovation in tokenized capital markets could develop in jurisdictions that offer a clearer path.
The government has said it wants the UK to lead the world in digital assets. Harries’ position is that this ambition requires a workable, supervised route to DeFi access—not a framework that leaves regulated firms unable to connect customers to the technology.
