The UK Treasury has published draft crypto regulation as part of a broader effort to establish the country as a global leader in financial innovation while enhancing consumer protection. Chancellor Rachel Reeves confirmed on 29 April that the UK will collaborate closely with the United States to create clear, robust rules for the digital asset industry.
“Through our Plan for Change, we are making Britain the best place in the world to innovate — and the safest place for consumers,” said Reeves. “Robust crypto rules will strengthen investor confidence, support fintech growth, and protect UK consumers.”
UK and US Strengthen Crypto Regulatory Collaboration
The announcement followed Reeves’ meeting with US Treasury Secretary Scott Bessent in Washington, D.C. The two officials agreed to expand cooperation via the UK-US Financial Regulatory Working Group to ensure responsible growth in digital assets.
The Treasury revealed its plans during UK Fintech Week in London, where it also released new draft legislation to regulate crypto firms. Under the proposed rules, digital asset exchanges, intermediaries, and service providers would fall under the UK’s financial services regime and be required to meet the same standards as traditional finance—covering transparency, operational resilience, and consumer protection.
New Rules Target Stability and Fraud Prevention
The Treasury emphasised that the new rules signal Britain’s openness to digital business while shutting the door on “fraud, abuse, and instability.” This marks a shift from the UK’s previous piecemeal approach to crypto regulation, moving closer to the US model and away from the EU’s more comprehensive Markets in Crypto Assets (MiCA) framework.
Stablecoins are a key focus of the proposed rules, which would apply only to issuers based in the UK. The government aims to finalise the new legislation by the end of the year, building on its 2023 consultation paper on the future crypto regulatory regime.
FSMA 2023: Foundations of the UK’s Crypto Regime
The Financial Services and Markets Act (FSMA) 2023 laid the groundwork by classifying stablecoins and digital assets as regulated activities in the UK. It also extended core banking rules—such as capital requirements, risk management, and customer transparency—to the crypto sector.
A major component of the FSMA was its overhaul of the Financial Promotions Regime, which now governs how digital asset products can be marketed to UK consumers. The law mandates a 24-hour cooling-off period for first-time investors, a clear warning on all promotions, and restricts communication of promotions to four legal routes. Promotions that do not comply are now considered criminal offences, with penalties including up to two years in prison.
Digital Assets Recognised as Legal Property
In a separate but related development, the UK government is advancing legislation to categorise digital assets as personal property. Following recommendations from the UK Law Commission, a new Property (Digital Assets, etc) Bill is currently being debated in the House of Lords. It aims to create a third legal category of personal property to cover assets like cryptocurrencies and NFTs, which do not fit traditional legal definitions.
This legislative shift is expected to enhance legal clarity for ownership rights and dispute resolution in the UK’s digital economy.
A Turning Point for the UK Crypto Landscape
Together, these reforms signal a transformative shift in the UK’s crypto regulation strategy. The government is aiming to balance innovation with responsibility, creating a framework that invites legitimate fintech players while deterring fraud and instability. The collaboration with the US could also shape global standards for digital asset governance in the years to come.
