UK Unveils Draft Crypto Regulations to Strengthen Market Oversight

On April 29, 2025, the UK government released draft legislation aimed at regulating the cryptocurrency sector, marking a significant step towards formalizing digital asset oversight. The proposed rules introduce new regulated activities, including operating cryptoasset trading exchanges and issuing stablecoins. Additionally, the framework addresses market abuse, admissions, and disclosure regimes, reflecting a comprehensive approach to crypto regulation.

The initiative builds upon consultations initiated in 2023 under the previous Conservative government. Despite the change in leadership, the current administration has expressed its commitment to advancing these regulatory plans. Economic Secretary Tulip Siddiq affirmed the government’s intention to implement the majority of the previous government’s crypto strategies.

Finance Minister Rachel Reeves emphasized the importance of the financial services sector as a driver of growth within the UK’s modern industrial strategy. Speaking at the IFGS fintech conference in London, Reeves announced that a broader financial services strategy would be unveiled on July 15 during her Mansion House address. She highlighted fintech as a priority area, indicating the government’s focus on fostering innovation and competitiveness in the financial sector.

The Financial Conduct Authority (FCA) is also playing a pivotal role in shaping the regulatory landscape. CEO Nikhil Rathi has outlined plans to streamline regulations, including simplifying the 10,000-page rulebook and facilitating capital raising for companies listed on the London Stock Exchange. These reforms aim to enhance London’s appeal as a financial hub and support economic growth.

While the UK moves forward with its regulatory agenda, the FCA has cautioned against a “race to the bottom” in financial regulation, particularly in light of deregulatory trends in the United States. FCA Chair Ashley Alder emphasized the importance of maintaining international regulatory standards to ensure global cooperation, especially in areas like crypto assets and sustainable finance.

The draft crypto regulations signify the UK’s commitment to establishing a secure and transparent environment for digital assets. By introducing clear guidelines and oversight mechanisms, the government aims to protect consumers, foster innovation, and position the UK as a leader in the evolving global crypto landscape.