UK Unveils Plans for a "Comprehensive Regulatory Regime" Aimed at Making the Country a Global Leader in Digital Assets

On April 29, UK Finance Minister Rachel Reeves unveiled plans for a “comprehensive regulatory regime” aimed at making the country a global leader in digital assets.

As part of the new rules, crypto exchanges, dealers, and agents will be regulated similarly to traditional financial firms, with requirements for transparency, consumer protection, and operational resilience, the UK Treasury said in a statement released following Reeves’ remarks.

The Financial Services and Markets Act 2000 (Cryptoassets) Order 2025 introduces six new regulated activities, including crypto trading, custody, and staking.

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,” Dante Disparte, chief strategy officer and head of global policy at Circle (CRYPTO: USDC), told CoinTelegraph.

Disparte added that the proposed framework can provide the predictability needed to “scale responsible digital financial infrastructure in the UK.”

UK’s new crypto rules are ‘net positive’

Vugar Usi Zade, the chief operating officer (COO) at Bitget exchange, expressed optimism regarding the new regulations, claiming that it “is a net positive for the industry.”

“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 authorisation. Firms finally get clear definitions of “qualifying crypto assets” and know exactly which activities - trading, custody, staking or lending - need FCA authorisation.”

For exchanges, including Bitget, the UK’s 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-out and invest in local infrastructure,” Zade said.

The new draft regulations classify stablecoins as securities, not as 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 authorised venues.

Zade claimed that excluding stablecoins from the Electronic Money Regulations 2011 (EMRs), which keeps them out of the e-money sandbox, could slow their use for payment.

However, Disparte, whose firm is the issuer of USDC, the world’s second-largest stablecoin by market capitalisation, said predictability is key to fostering responsible growth in the UK.

UK to require FCA approval for foreign crypto firms

Among the biggest changes as part of the new draft rules is the territorial reach. Non-UK platforms serving UK retail clients will need the FCA authorisation. The “overseas persons” exemption is limited to certain B2B relationships, effectively ringing-fencing the UK retail market.

Crypto staking enters the perimeter as well. Liquid and delegated staking services must now register, while solo stakers and purely interface-based providers are exempt. New custody rules extend to any setup that gives a party unilateral transfer rights, including certain lending and MPC (multiparty computation) arrangements.

“Some DeFi nuances still need fleshing out, but the direction is toward efficient, tailored compliance rather than a blanket restriction,” Bitget’s Zade said.

He added that the broad “staking” definition might sweep in non-custodial DeFi models lacking a central provider. “Proposed credit-card purchase restrictions - though aimed at high-risk use - could dampen retail participation in token launches.”

Furthermore, Zade said bank-grade segregation rules for client assets could burden lean DeFi projects. “Final rule tweaks will need to mitigate these side effects.”

The FCA plans to publish final rules on crypto sometime in 2026, 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.