Britain will begin regulating cryptoassets from October 2027, the finance ministry said on Monday, in a move aimed at providing greater certainty for the industry while keeping out what it described as “dodgy actors”.
The government is set to introduce legislation to parliament later on Monday that will bring crypto-related firms under the scope of existing financial regulation. This approach would align the UK more closely with the United States, rather than the European Union, which has adopted a bespoke regulatory framework for the sector. A draft version of the bill has seen only minor revisions since it was published earlier this year, according to a ministry spokesperson.
Global interest in cryptoassets has risen since U.S. President Donald Trump took office with promises to support the sector, although bitcoin has retreated sharply in recent months after reaching a record high.
While the industry views the U.S. as taking a more crypto-friendly stance than Britain, the European Union’s Markets in Cryptoassets regime came into force in 2024. The UK has said it will work with the United States through a “transatlantic taskforce” to coordinate approaches to digital assets.
Finance minister Rachel Reeves said the new rules would set out “clear rules of the road”, enhance consumer protection and prevent bad actors from operating in the market.
However, Natalie Lewis, a partner at law firm Travers Smith, told Reuters she hoped the final legislation would include more substantive changes, citing several technical legal flaws in the original draft.
The UK’s crypto regulatory framework is gradually coming together, with the Financial Conduct Authority developing tailored rules covering trading, market abuse, custody and issuance, and the Bank of England last month outlining proposals to regulate stablecoins used for everyday payments.
Even so, regulators continue to warn of the risks involved, stressing that investors in cryptocurrencies should be prepared for the possibility of losing all their money.
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