On April 29, UK Finance Secretary Rachel Reeves presented initiatives for a “thorough regulatory framework” aimed at establishing the nation as a worldwide frontrunner in digital assets.
According to the suggested regulations, cryptocurrency exchanges, dealers, and brokers will be managed akin to conventional financial institutions, with mandates for transparency, consumer safeguarding, and operational durability, the UK Treasury mentioned in a communiqué issued after Reeves’ comments.
According to the communiqué, the Financial Services and Markets Act 2000 (Cryptoassets) Order 2025 introduces six new regulated activities, encompassing crypto trading, custody, and staking.
Rather than adopting a lenient approach akin to the EU’s Markets in Crypto-Assets (MiCA), the UK is enforcing comprehensive securities regulation for cryptocurrencies, as stated by the UK-based legal firm Wiggin. This includes capital requirements, governance criteria, market manipulation regulations, and disclosure responsibilities.
“The UK’s proposed crypto regulations signify a substantial advancement towards adopting a rules-based digital asset economy,” Dante Disparte, chief strategy officer and head of global policy at Circle, articulated to Cointelegraph.
“By indicating a readiness to provide regulatory clarity, the UK is positioning itself as a haven for responsible innovation.”
Disparte emphasized that the suggested framework could deliver the predictability essential to “scale responsible digital financial infrastructure in the UK.”
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UK’s new crypto regulations seen as “net positive”
Vugar Usi Zade, the chief operating officer (COO) at Bitget exchange, also noted a positive outlook regarding the new regulations, asserting that it “is a net positive” for the sector.
“I believe numerous companies have recently stepped back or were hesitant to enter the UK due to unclear requirements on which activities, products, and operations necessitate FCA approval. Firms will finally receive clear definitions of “qualifying crypto assets” and understand precisely which activities—trading, custody, staking, or lending—require FCA authorization.”
For exchanges, including Bitget, the UK’s draft regulations imply they must secure full endorsement from the Financial Conduct Authority (FCA) to provide crypto trading, custody, staking, or lending services to UK users.
The regulations also grant companies two years to adapt their systems, such as capital and reporting. “Aligning each service line to the new perimeter introduces compliance burdens, but this clarity enables us to plan product launches and invest in local infrastructure,” Zade mentioned.
The new draft regulations reclassify stablecoins as securities rather than e-money. Consequently, UK-issued fiat-backed tokens must comply with prospectus-like disclosures and redemption protocols. Non-UK stablecoins can still operate, but solely via authorized pathways.
Zade asserted that omitting stablecoins from the Electronic Money Regulations 2011 (EMRs), which excludes them from the e-money sandbox, might impede their usage for payments.
Nonetheless, Disparte, whose firm issues USDC (USDC), the second-largest stablecoin globally by market capitalization, mentioned that predictability is crucial for promoting responsible expansion in the UK.
“What is paramount is predictability: a framework that permits firms to construct, test, and grow responsibly—without fearing arbitrary enforcement or fluctuating criteria. If achieved, this may signify a significant moment in the UK’s digital asset evolution.”
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UK will necessitate FCA approval for foreign crypto enterprises
Among the most significant adjustments in the new draft regulations is the territorial scope. Non-UK platforms catering to UK retail clients will require FCA authorization. The “overseas persons” exemption is confined to specific B2B relationships, effectively isolating the UK retail market.
Crypto staking now falls within the regulatory framework. Liquid and delegated staking services are required to register, while solo stakers and purely interface-based providers are exempt. New custody regulations apply to any arrangements that grant a party unilateral transfer rights, encompassing some lending and MPC (multiparty computation) setups.
“Certain DeFi specifics still require elaboration, but the trajectory is towards efficient, bespoke compliance rather than broad restrictions,” Bitget’s Zade stated.
He added that the expansive “staking” definition may encompass non-custodial DeFi models lacking a central participant. “Proposed credit-card purchase limitations—though aimed at high-risk usage—could deter retail involvement in token launches,” he remarked.
Additionally, Zade noted that bank-grade segregation mandates for client assets could impose challenges on nimble DeFi initiatives. “Final adjustments to the regulations will need to address these concerns.”
The FCA intends to issue final regulations regarding crypto in 2026, establishing the foundation for the UK regulatory framework to be enacted. The pathway to enhanced regulatory transparency in the UK might follow the European Union, which began implementing its MiCA framework in December.
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