The UK chief executive of Coinbase has said the Financial Conduct Authority's (FCA) regulatory clampdown on digital assets will eliminate non-compliant firms and ultimately attract more customers to the sector.

Keith Grose, who leads Coinbase's UK operations, said the rules unveiled by the FCA earlier this month will "wipe out" companies unwilling to meet compliance standards, thereby boosting consumer trust.

"It will wipe out people that don't want to focus on compliance," Grose said in an interview with City AM. "That's going to be a no-go now in the UK."

The FCA has introduced what it described as a "landmark" overhaul of the crypto market, requiring companies to obtain regulatory approval before serving British customers and subjecting them to heightened scrutiny. The framework positions the UK alongside the European Union, which has been rolling out its own comprehensive Markets in Crypto-Assets (MiCA) regulation, as Western economies move to bring digital assets under formal oversight.

Under the new framework, crypto platforms must hold a full financial licence — the FSMA Part 4A Permission — to conduct business with UK clients, with a compliance deadline of October 2027. All firms will be required to meet stronger resilience standards and undergo capital and stress testing to ensure they can withstand market shocks.

The regulator has also implemented a new industry-led framework designed to detect and prevent market manipulation, insider trading, and other illicit activity. Platforms that fail to secure the necessary licence or refuse to comply with the rules will be removed from the market entirely.

According to the latest FCA figures, approximately eight per cent of UK adults hold cryptocurrency, representing around 4.5 million people.

Grose said the elevated regulatory standards would help the sector legitimise itself among consumers who remain sceptical of digital assets.

"It…builds confidence in our overall system and security," he said. "They know I can go to the financial ombudsman if something goes wrong."

Political Landscape: Burnham and Rigby

Grose also welcomed the return of Lucy Rigby as City minister, echoing the wider fintech sector's view that she "gets" the importance of these companies in driving economic growth.

During her previous tenure as City minister, Rigby expressed support for the fintech sector and sought to make the UK a more favourable location for such firms. However, Prime Minister Andy Burnham has yet to formally clarify his position on digital assets.

Burnham previously voiced support for the sector when Coinbase's policy team met him during his tenure as mayor of Greater Manchester.

"He gets that digital assets are an important part of innovation," Grose said. "I'm not saying he's deep in this ecosystem, but I think he is supportive."

Grose urged both ministers to build on the progress achieved under the previous Starmer government in giving fintechs greater room to operate in the domestic market. He noted that Rigby must once again lead this effort to prevent the US from attracting companies away from the UK.

Expanding Beyond Crypto

Coinbase has also received authorisation in the UK to offer traditional financial instruments, including equities and commodities, on its platform.

The regulatory approval comes as the exchange navigates a challenging crypto market. The company's stock has fallen 30.8 per cent year to date, trading at $163 (£121m). In April, billionaire founder and chief executive Brian Armstrong announced plans to cut 14 per cent of Coinbase's global workforce as part of cost-reduction measures.

Grose said the regulatory "stamp of approval" would enable Coinbase to compete directly with established financial providers and expand its offerings beyond cryptocurrency.

The licence also positions Coinbase to compete with platforms such as AJ Bell and IG, which have been adding crypto assets to their offerings — a sign of the converging competition between traditional brokerage and digital asset platforms.

"You're heading into this world where everyone is trying to compete to be the primary financial account," Grose said. "Certainly it will be more competitive."