UK Chancellor Rachel Reeves has announced sweeping plans for a new regulatory framework designed to establish Britain as a global hub for digital assets.
The initiative introduces a robust set of rules that will treat crypto firms much like traditional financial institutions.
In a statement issued by the Treasury, the proposed regime will cover crypto exchanges, dealers, and agents, requiring them to meet strict standards on transparency, consumer protection, and operational resilience.
The Financial Services and Markets Act 2000 (Cryptoassets) Order 2025 will create six new categories of regulated activities, including crypto trading, custody, and staking.
Unlike the EU’s more flexible Markets in Crypto-Assets (MiCA) regulation, the UK is taking a firmer stance by applying full securities legislation to digital assets.
This includes imposing capital requirements, governance obligations, anti-market abuse safeguards, and disclosure protocols, according to legal experts at Wiggin LLP.
Dante Disparte, Chief Strategy Officer at Circle, hailed the draft regulations as a “significant milestone” in advancing a rule-based digital asset economy. “The UK is sending a strong message about regulatory clarity, making it an attractive environment for responsible innovation,” he told Cointelegraph.
Vugar Usi Zade, COO of the Bitget crypto exchange, echoed these sentiments, calling the draft a “net positive” for the industry. He noted that many companies had been reluctant to operate in the UK due to regulatory uncertainty.
“The new framework finally defines what qualifies as a crypto asset and which activities require FCA approval, such as trading, custody, staking, and lending,” he said.
Under the proposed regime, crypto firms must secure authorisation from the Financial Conduct Authority (FCA) to operate in the UK market. They will also be granted a two-year window to bring their systems in line with the new standards, including capital buffers and reporting requirements. Zade added that this clarity will help exchanges plan product launches and scale up local infrastructure.
One of the most notable shifts in the draft regulations is the reclassification of stablecoins.
UK-issued fiat-backed tokens will be treated as securities, not electronic money, meaning they will need to meet disclosure and redemption standards similar to those of traditional securities.
Stablecoins issued outside the UK can still circulate but only through approved platforms.
Zade warned, however, that excluding stablecoins from the 2011 Electronic Money Regulations could hinder their potential for everyday payments.
“What matters most is predictability. A clear, stable regulatory framework allows firms to innovate and grow without facing sudden changes or legal ambiguity,” he explained.
The regulations also expand their territorial scope. Overseas crypto platforms catering to UK retail clients must now register with the FCA. The previously available “overseas persons” exemption will be restricted to certain business-to-business interactions, effectively ring-fencing the retail market.
Crypto staking will fall under regulatory scrutiny as well. Both liquid and delegated staking services must register, although individual stakers and non-custodial interface providers will be exempt.
New rules around custody will target any setup that allows unilateral asset transfers, including multiparty computation (MPC) structures and certain lending arrangements.
While aspects of decentralised finance (DeFi) still require further clarification, Bitget’s Zade said the overall direction is promising.
“The draft shows a willingness to support responsible DeFi through targeted compliance, rather than broad-stroke prohibitions,” he noted.
However, he cautioned that restrictions on credit card purchases for token launches could limit retail investor engagement.
