The Treasury has announced that cryptocurrencies will be brought under formal financial regulation, treating them like other financial products.
Firms offering crypto services will fall under the Financial Conduct Authority’s jurisdiction and must meet a clear set of standards from the financial watchdog.
The new rules, which come into force in 2027, aim to make it easier to detect suspicious activity, impose sanctions, and hold firms accountable for their operations.
Chancellor Rachel Reeves said the legislation provides certainty for firms to invest, innovate, and create high-skilled jobs in the UK, while offering strong protections for consumers and keeping dishonest actors out of the market.
The move is part of a wider strategy to support legitimate crypto firms while clamping down on fraud. It follows growing pressure from industry and regulators to introduce progressive rules for the digital asset sector, with the UK aiming to maintain its position as a leading global financial centre.
The Bank of England has recently softened its stance on stablecoins, opening consultations to support the UK’s share of the £200bn market. Stablecoins, cryptocurrencies pegged to official currencies, have been a point of contention for the Bank, with previous restrictions criticised by industry groups for stifling London’s fintech ambitions.
The FCA rules, alongside government and Bank of England guidance, signal a shift towards a more structured environment for digital assets. The UK is positioning itself to encourage investment and innovation in crypto while ensuring that consumer protection and market integrity remain central.