Officials expect the rules will make identifying suspicious transactions easier while improving sanction enforcement and corporate accountability.
U.K. Crypto News
The U.K. Treasury will establish comprehensive legislation by 2027 to regulate crypto assets under the same standards as traditional financial products. The Financial Conduct Authority will oversee enforcement of these new rules once they take effect.
The government aims to increase transparency across the digital asset sector through this regulatory framework. Officials expect the rules will make identifying suspicious transactions easier while improving sanction enforcement and corporate accountability.
Chancellor Rachel Reeves stated that clear regulations will give firms the certainty needed to invest and innovate in the U.K. market. The framework will create high-skilled jobs while providing consumer protections and blocking bad actors from operating domestically.
U.K. lawmakers passed the Property (Digital Assets etc.) Act 2025 earlier this month. This legislation established digital assets as legally recognized property, laying the groundwork for a broader regulatory framework planned for 2027.
Current U.K. rules require crypto companies to register with the FCA under Anti-Money Laundering and counter-terrorist financing obligations. These requirements include Know Your Customer due diligence and suspicious transaction reporting.
The FCA is simultaneously working to promote sterling-pegged stablecoins. Chief Executive Nikhil Rathi recently told Prime Minister Keir Starmer that the agency will prioritize enabling local firms to experiment with stablecoin payments in 2026 through a regulatory sandbox program.
Consensys Senior Counsel Bill Hughes previously said that heavy-handed U.K. oversight has damaged the country's position as a global crypto hub. The U.S. has taken a friendlier regulatory approach to digital assets, attracting businesses that might have operated from the U.K.
Hughes argued that treating everything in crypto as a financial instrument subject to all applicable rules significantly hampers U.K. competitiveness. The 2027 framework will need to balance investor protection with innovation if the U.K. wants to reclaim its position in global digital asset markets.
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