REGULATORY RADAR • BCB GROUP
Safeguarding, at its simplest, means client money stays client money, always.
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 payments regulations more closely
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.”
With new rules for the FCA’s safeguarding regime due in May 2026, BCB Group looks closely into the implications for crypto payments stakeholders. Keeping crypto in safe hands
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.
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
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 SAFEGUARDING 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 and
“We’ve engaged with our third‑ party reconciliation provider to
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.
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
Oliver Tonkin Co-Founder and President BCB Group
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