UK To Regulate Crypto Like Traditional Finance From 2027

The UK will regulate crypto like traditional financial products under Financial Conduct Authority (FCA) oversight from 2027.

Its government will introduce legislation into parliament today that would see crypto firms, including exchanges, digital wallets and stablecoins, facing the same regulatory framework as banks and brokers. They will also be subject to the same transparency standards.

“Bringing crypto into the regulatory perimeter is a crucial step in securing the UK’s position as a world-leading financial centre in the digital age,” said Chancellor Rachel Reeves. “By giving firms clear rules of the road, we are providing the certainty they need to invest, innovate and create high-skilled jobs here in the UK, while giving millions strong consumer protections, and locking dodgy actors out of the UK market.”

The FCA and Bank of England aim finalize rules by the end of 2026. This builds on similar legislation, the Markets in Crypto Assets (MiCA) framework, which was introduced by the European Union a year ago.

About 12% Of UK Adults Own Crypto

The move comes as FCA data shows that approximately 12% of UK adults hold some form of crypto. 

As a result of the increasing adoption, the UK has formally recognized Bitcoin and other crypto assets as legal property under a new Act of Parliament, which means that digital assets can be owned, recovered, and inherited. 

The FCA is also planning rules for trading and market abuse, custody and issuance. The Bank of England also unveiled proposals for regulating stablecoins last month.

UK Plans To Lead The World In Crypto Adoption

The UK’s push to establish regulations for digital assets is part of a broader effort to be a market leader in crypto adoption. 

Economic secretary Lucy Rigby told the Financial Times that the UK Treasury’s push to regulate crypto like other financial products “is a milestone.” 

“Our intention is to lead the world in digital asset adoption,” she said. “The rules we are putting in place are going to be proportionate and fair.”  

Rigby said the new rules would be “good for growth, and that they will encourage firms to invest in the UK while also providing consumers with the necessary protections. “I don’t see any conflict between those things.”  

US Pushing To Get Its Own Crypto Regulation Out

As the UK moves ahead with its crypto regulation, lawmakers in the US are drafting their own legislation. 

This year, the US has already signed the GENIUS Act into law. Now, lawmakers are working on a draft proposal for the Digital Asset Market (CLARITY) Act, which aims to clarify how digital assets should be classified and regulated. 

Lawmakers seek to reduce jurisdictional confusion between the US Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).

In October, the US and UK also announced a joint initiative called the “Transatlantic Taskforce for Markets of the Future,” which is designed to strengthen cooperation on financial markets, including crypto. 

One of the main focuses of that joint initiative is stablecoins, which are cryptos pegged to an underlying asset, usually fiat currencies. Currently, the largest stablecoins by market cap are pegged to the US dollar, according to CoinGecko data. 

Top stablecoins by market cap (Source: CoinGecko)

The market cap of these tokens has grown to more than $300 billion after the US passed the GENIUS Act, providing a regulatory framework for stablecoins in the US for the first time. 

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