UK to implement “comprehensive regulatory regime” for cryptoassets, targeting global leadership

Under the proposed rules, crypto exchanges, dealers, and agents will be regulated similarly to traditional financial firms

The UK is applying the full weight of securities regulation to crypto, aiming for a “comprehensive regulatory regime” to make the country a global leader in digital assets, set out in the Financial Services and Markets Act 2000 (Cryptoassets) Order 2025.

The proposals, which are open for consultation until 18 June, will see crypto exchanges, dealers and agents regulated similarly to traditional financial firms, with requirements for transparency, consumer protection and operational resilience.

The crypto edges of the new regime are six regulated activities: crypto trading, crypto exchange, crypto custody, crypto investment services, and crypto crowdfunding.

Rather than opting for a light-touch regime similar to the EU's Markets in Crypto-Assets (MiCA), the UK is applying the full weight of securities regulation to crypto, according to UK-based law firm Wiggin. That includes capital requirements, governance standards, market abuse rules and disclosure obligations.

"The UK's draft crypto regulations represent a meaningful step toward embracing a rules-based digital asset economy," said Dante Disparte, chief strategy officer and head of global policy at Circle.

"This proposed framework can provide the predictability needed to scale responsible digital financial infrastructure in the UK."

The new draft regulations classify stablecoins as securities, not e-money. This means UK-issued fiat-backed tokens must meet prospectus-style disclosures and redemption protocols. Non-UK stablecoins can still circulate, but only via authorized venues.

Excluding stablecoins from the Electronic Money Regulations 2011 (EMRs), which keeps them out of the e-money sandbox, could slow their use for payment, according to Bitget COO Vugar Usi Zade.

"I think a lot of companies recently exited or hesitated to enter the UK because they were not clear about what activities, products and operations need FCA authorization," he added. "Finally, firms get clear definitions of 'qualifying crypto assets' and exactly which activities - trading, custody, staking or lending - need FCA authorization."

For exchanges, including Bitget, the draft rules mean they need full approval from the Financial Conduct Authority (FCA) to offer crypto trading, custody, staking or lending services to UK users. The rules also give companies two years to adjust their systems, like capital and reporting.

"Mapping each service line to the new perimeter adds compliance overhead, but that clarity lets us plan product roll-outs and invest in local infrastructure," Zade said.

The rules will come into force in 2025, setting the groundwork for the UK regulatory regime to go live. The roadmap to greater regulatory clarity in the UK could follow the European Union, which started to implement its MiCA framework in December.