Thomas Daniels
The United Kingdom is advancing its position as a global leader in digital finance with the introduction of comprehensive draft legislation regulating cryptoassets. Announced by Chancellor Rachel Reeves on April 29, 2025, the proposed framework aims to integrate digital assets into the existing financial regulatory structure, emphasizing transparency, consumer protection, and operational resilience.
Under the Financial Services and Markets Act 2000 (Cryptoassets) Order 2025, six new regulated activities are introduced, encompassing crypto trading, custody, staking, and stablecoin issuance. These activities will be subject to the same rigorous standards as traditional financial services, including capital requirements, governance protocols, and disclosure obligations.
The legislation mandates that both domestic and foreign crypto firms obtain authorization from the Financial Conduct Authority (FCA) to operate within the UK. This move effectively ring-fences the UK retail market, ensuring that only compliant entities can offer services to UK consumers.
Stablecoins are reclassified as securities under the new rules, requiring UK-issued fiat-backed tokens to adhere to prospectus-style disclosures and redemption protocols. While non-UK stablecoins can still circulate, they must do so through authorized venues.
Industry leaders have expressed support for the UK’s approach. Dante Disparte, Chief Strategy Officer at Circle, stated that the draft regulations provide the predictability needed to scale responsible digital financial infrastructure in the UK. Similarly, Vugar Usi Zade, COO at Bitget, noted that the clarity offered by the new rules allows firms to plan product rollouts and invest in local infrastructure.
The FCA is currently seeking feedback on the proposed regulations, with final rules expected to be published in 2026. This initiative is part of the UK’s broader strategy to enhance its financial services sector’s growth and competitiveness, with fintech identified as a priority area.
