• Clear new rules to give investors confidence and protect consumers
• Chancellor also reveals discussions with US about supporting the use and responsible growth of digital assets, as Government works in national interest to drive growth through Plan for Change

Firms offering services for cryptoassets like Bitcoin and Ethereum will be subject to new, clear rules, boosting investor confidence and driving growth through the Plan for Change.

At a major summit in London to mark UK Fintech Week, the Chancellor revealed that the UK has published draft legislation for regulating cryptoassets – better protecting millions of people across Britain.

Around 12% of UK adults now own or have owned crypto, up from just 4% in 2021. But too often, consumers have been left exposed to risky firms and scams.

Under the new rules, crypto exchanges, dealers and agents will be brought into the regulatory perimeter — cracking down on bad actors while supporting legitimate innovation.  Crypto firms with UK customers will also have to meet clear standards on transparency, consumer protection, and operational resilience — just like firms in traditional finance.

The Chancellor also revealed that the UK and US will use the upcoming UK – U.S. Financial Regulatory Working Group to continue engagement to support the use and responsible growth of digital assets.

This follows discussions in Washington between the Chancellor and the US Treasury Secretary, Scott Bessent, where they also discussed opportunities to support businesses to innovate on both sides of the Atlantic. This includes looking at ideas for how we could allow for greater collaboration on digital securities between the UK and US, including the proposals put forward by SEC Commissioner Hester Peirce for a transatlantic sandbox for digital securities.

Rachel Reeves, Chancellor of the Exchequer, said:

Through our Plan for Change, we are making Britain the best place in the world to innovate — and the safest place for consumers. Robust rules around crypto will boost investor confidence, support the growth of Fintech and protect people across the UK.

The announcement sends a clear signal: Britain is open for business — but closed to fraud, abuse, and instability.

The Chancellor also announced that the government will publish the first-ever Financial Services Growth and Competitiveness Strategy on 15 July, alongside her Mansion House speech. This will support the financial services sector’s long term growth, with Fintech identified as a priority sector, and help it finance investment and growth across the UK.

The government will bring forward final cryptoasset legislation at the earliest opportunity, following engagement on the draft provisions with industry.

More information

• The UK’s Financial Conduct Authority (FCA) consumer research found that around 12% of UK adults owned crypto in 2024, up from 4% in 2021.
• The 2023 Treasury consultation proposed bringing a wide range of cryptoasset activities — including exchanges and custody services — within the UK’s financial services regulatory perimeter.
• The government remains committed to making the UK a global hub for digital asset technologies, aligned with the Plan for Change to drive growth, innovation and security.
• Read the draft legislation and accompanying policy explainer.

Source: HM Treasury

🚨BREAKING: HM TREASURY PUBLISHES DRAFT CRYPTOASSET REGULATIONS 🇬🇧

Today, @hmtreasury published its draft Statutory Instrument (SI) and Policy Note on the UK’s cryptoasset regulatory regime. The draft is open for comments on technical issues or oversights until 23 May 2025.

***… pic.twitter.com/DXbXUH6B1h

— CryptoUK (@CryptoUKAssoc) April 29, 2025

CryptoUK, the trade body representing the digital asset sector in the UK, said:

@hmtreasury published its draft Statutory Instrument (SI) and Policy Note on the UK’s cryptoasset regulatory regime. The draft is open for comments on technical issues or oversights until 23 May 2025.

*** KEY REGULATORY CHANGES ***

The draft SI will amend the Regulated Activities Order 2001 (RAO) to:

Define “qualifying cryptoassets” and “qualifying stablecoin”

Classify both as specified investments under FSMA

Specify related activities as regulated, requiring FCA authorisation

*** FURTHER AMENDMENTS ***

Stablecoin backing assets will not be treated as AIFs or CISs

Clear distinction between qualifying stablecoins, tokenised deposits, and e-money

New RAO chapter introduces cryptoasset-specific investment and activity categories

*** ISSUANCE REQUIREMENTS ***

Firms must be authorised for any of the following stablecoin-related activities carried out from a UK establishment:

Offering

Redemption

Maintaining value

*** TRADING AND EXCHANGE ***

Operating a qualifying cryptoasset trading platform will fall within scope if cryptoassets are exchanged for other cryptoassets or money (including e-money).

*** STAKING ***

Qualifying cryptoasset staking includes liquid staking

Issuing liquid staking tokens is treated as a regulated dealing activity — requiring separate authorisation

*** DECENTRALISED FINANCE (DEFI) ***

No specific DeFi provisions are included. Where activities are conducted in a truly decentralised manner (i.e. no identifiable party acting by way of business), authorisation will not be required.

*** UK CONSUMER PROTECTION ***

Firms interacting with UK consumers — whether based in the UK or overseas — must be authorised if they:

Operate a cryptoasset trading platform

Deal in qualifying cryptoassets as principal or agent

*** STREAMLINING COMPLIANCE ***

Firms authorised under the new regime will not need to separately register under the MLRs as cryptoasset exchange or custodian wallet providers — only an FCA notification will be needed.

*** SOME KEY AREAS IT WILL NOT COVER ***

Provisions relating to market abuse and admissions and disclosures are not included in this SI, but will be published in due course.

The Government has said it will not proceed with amending the PSRs 2017 to bring UK-issued stablecoins into regulated payments at this time.

*** NEXT STEPS ***

The FCA will set a window for advance authorisation applications before the full regime comes into effect. There are also provisions for firms currently operating in the UK whose applications are unsuccessful.

Source: CryptoUK