Crypto firms face clamp down from Treasury and watchdog
Cryptocurrencies will face regulation like any other financial products under new laws announced by the Treasury.
Firms that offer crypto products will fall under the Financial Conduct Authority’s jurisdiction as part of new rules requiring digital assets providers to meet a set of standards from the City watchdog.
The Labour government said the new legislation, which comes into force in 2027, will make it easier to detect suspicious activity, impose sanctions, and hold firms to account for their activity.
Chancellor Rachel Reeves said: “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.
“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 changes come as part of the government’s agenda to support and legitimise crypto firms, whilst also clamping down on fraud.
Government and regulators progress on digital assets
Labour and regulators have faced pressure to introduce more progressive rules for the crypto market.
The Bank of England last month relaxed its stance on stablecoin in a new consultation paper aimed at helping Britain grab a slice of the £200bn market.
The central Bank has previously faced calls to “publicly walk back” on its position on digital assets over fears the UK was missing out on the market.
Stablecoins, cryptocurrencies pegged to official currencies, have been a key point of contention for Governor Andrew Bailey over the last few years.
Bailey met with Reform UK’s Nigel Farage and Richard Tice, who had branded the Governor a “dinosaur” for his prescriptive views on digital asset, shortly ahead of the consultation publication.
Fintech industry body Innovate Finance accused the Bank of “killing” London’s stablecoin ambitions after preventing issuers from earning interest on assets.