U.K. to Emulate U.S. in Cryptocurrency Policies
Hop on Board with the UK's Crypto Casino
According to Bloomberg, the UK is joining forces with the U.S. in a frantic race to regulate the cryptocurrency world. UK Chancellor Rachel Reeves has emphasized the necessity of international collaboration to keep the UK in the limelight of the global digital asset game.
The move comes in response to the world's economic powerhouse quickly embracing the crypto industry.
With Bitcoin isn't going anywhere, says CIA, and Ethereum in dire straits if it doesn't scale a whopping 100X, according to a researcher, and more stirring news on Bitcoin, Solana, Dogecoin, and Shiba Inu accumulating, the cryptocurrency sphere is experiencing a flurry of activity.
Recently, Reeves let the cat out of the bag about meeting with Bessent to discuss the UK-US economic prosperity deal.
The UK's Crypto Game-Changer
On Tuesday, Reeves dropped a bombshell by unveiling draft laws meant to regulate exchanges and brokers. The new rules are designed to boost investor confidence and stimulate growth.
Under the proposed legislation, crypto exchanges and brokers will be regulated like traditional sectors such as investment banking and insurance.
"Qualifying cryptoassets" and "qualifying stablecoins" will be classified as specified investments.
Activities like operating a cryptocurrency trading platform, issuing stablecoins, custodying crypto, and arranging deals in crypto will demand authorization from the Financial Conduct Authority (FCA).
Decentralized finance (DeFi) projects, however, will be exempt from the authorization requirements as they lack a central controlling party.
The UK is aiming to set up this regulatory regime by year's end.
By the way, did you know?The UK’s new cryptocurrency regulatory regime, announced on 29 April 2025, introduces a comprehensive oversight of cryptoassets to balance innovation with consumer protection. Key details include:
Regulatory Scope and Framework
- Full financial services regulation: Cryptoassets, including stablecoins, will fall under the UK’s financial services regulatory perimeter, requiring full authorization to operate[2][3].
- Covered activities: Trading platforms, custody services, brokerage, dealing, and stablecoin issuance will be regulated[2][3].
Consumer Protection Measures
- Transparency and operational resilience: Firms must adhere to standards similar to traditional finance, including clear disclosures, fraud prevention, and system reliability[1][3].
- Crackdown on bad actors: Exchanges and dealers operating in the UK will face stricter oversight to minimize risks of scams and market abuse[1][4].
International Collaboration
- US-UK cooperation: Both countries will align their digital asset regulatory approaches through the Financial Regulatory Working Group, focusing on "responsible growth"[1][4].
- Divergence from EU: The UK's regime will differ from the EU’s MiCAR framework, emphasizing competitiveness while maintaining consumer safeguards[3].
Implementation Timeline
- Consultation phase: The draft legislation is open for technical consultation until 23 May 2025[2].
- Post-consultation: Regulatory rulemaking is expected throughout 2025, with full implementation likely in subsequent years[2][3].
The reforms aim to establish the UK as a global cryptocurrency innovation hub, as 12% of UK adults (7 million) already hold cryptoassets[1][3]. A Financial Services Growth and Competitiveness Strategy is set to be released in July 2025 to further drive the sector's development[3].
- The UK, following the US, is accelerating efforts to regulate the cryptocurrency world, aiming to create a competitive edge in the global digital asset game.
- Bitcoin, the pioneering cryptocurrency, is forecast to maintain its presence as the world's economic powerhouses embrace the crypto industry.
- In light of Bitcoin's resilience and Ethereum's need to scale significantly, the cryptocurrency trading landscape is buzzing with activity.
- Rachel Reeves, the UK Chancellor, has revealed plans to unveil draft laws that will regulate crypto exchanges and brokers, similar to traditional sectors like investment banking and insurance.
- These new regulations, involving the Financial Conduct Authority (FCA), will classify "qualifying cryptoassets" and "qualifying stablecoins" as specified investments.
- The UK aims to finalize this regulatory regime by the end of the year, giving authorization for activities like cryptocurrency trading, stablecoin issuance, custody, and dealing.
- Despite the regulation, Decentralized Finance (DeFi) projects will be exempt from the authorization requirements due to their decentralized nature.
- With the UK's new regulatory framework set to balance innovation with consumer protection, the country positions itself as a leading innovator in the ever-evolving cryptocurrency finance scene, ready to welcome investors ready to delve into the technology.
