The UK government has published draft legislation that will bring crypto firms into the regulatory perimeter.
Unveiled by Chancellor Rachel Reeves, the rules are designed to promote innovation in the sector, boost investor confidence and crack down on fraudsters.
Around 12% of UK adults now own or have owned crypto, up from just four per cent in 2021. But the regulatory environment has yet to properly catch up, too often leaving consumers exposed to risky firms and scams, says the government.
Under the new rules, crypto exchanges, dealers and agents will be brought into the regulatory fold. Crypto firms with UK customers will also have to meet clear standards on transparency, consumer protection, and operational resilience — just like firms in traditional finance.
The Chancellor also revealed that the UK and US will use the upcoming UK - US Financial Regulatory Working Group to work on supporting the use and responsible growth of digital assets.
Says Reeves: "Robust rules around crypto will boost investor confidence, support the growth of Fintech and protect people across the UK."
The sector has broadly welcomed the plans, with a spokesperson for trade association CryptoUK saying: "Rachel Reeves’ commitment to provide new and clearer rules for the digital assets industry is very much welcomed and a big victory for our members, who have been working tirelessly over the last seven years to place the UK at the forefront of the crypto industry."