In a bold move to solidify its status as a global hub for digital assets, the United Kingdom has rolled out a comprehensive regulatory framework aimed at crypto enthusiasts and businesses alike. Announced on April 29, 2025, by Finance Minister Rachel Reeves, these draft rules promise to regulate crypto firms with the same rigor as traditional financial institutions, marking a significant shift in the country’s approach to the burgeoning crypto market.
The New Frontier of Crypto Regulation
The Financial Services and Markets Act 2000 (Cryptoassets) Order 2025, as it’s formally known, introduces six new regulated activities, including crypto trading, custody, and staking. Unlike the European Union’s relatively hands-off Markets in Crypto-Assets (MiCA) framework, the UK’s approach is decidedly more stringent, applying the full breadth of securities regulation to crypto. This encompasses capital requirements, governance standards, market abuse rules, and disclosure obligations. This aligns with the UK’s FCA’s call for public and industry views on crypto regulation, highlighting the country’s proactive stance in shaping its digital asset policies.
Dante Disparte, chief strategy officer and head of global policy at Circle, commented, “The UK’s draft crypto regulations represent a meaningful step toward embracing a rules-based digital asset economy.” His optimism doesn’t end there. Disparte believes that providing regulatory clarity positions the UK as a “safe harbor for responsible innovation,” setting the stage for scaling digital financial infrastructure responsibly.
Vugar Usi Zade, COO at Bitget exchange, echoed this sentiment, hailing the regulations as a “net positive” for the industry. “Firms finally get clear definitions of ‘qualifying crypto assets’ and know exactly which activities need FCA authorization,” he noted. For exchanges like Bitget, these new rules mean securing full approval from the Financial Conduct Authority (FCA) to operate in the UK, a move that ensures greater transparency and consumer protection.
Challenges and Opportunities
The new draft regulations also come with their share of challenges. The reclassification of stablecoins as securities, rather than e-money, demands prospectus-style disclosures and redemption protocols for UK-issued fiat-backed tokens. While non-UK stablecoins can still circulate, they must do so via authorized venues. This change, according to Zade, could potentially slow the use of stablecoins for payment by excluding them from the Electronic Money Regulations 2011 sandbox.
However, Disparte, whose firm issues the USDC stablecoin, remains upbeat. “What matters most is predictability: a framework that enables firms to build, test, and grow responsibly,” he asserted. If implemented effectively, this could be a pivotal moment for the UK’s digital asset landscape. This sentiment echoes the concerns raised by US crypto groups urging the SEC for clarity on staking, underscoring the global demand for regulatory transparency.
Another significant change is the territorial reach of the regulations. Non-UK platforms serving UK retail clients will now require FCA authorization, with the “overseas persons” exemption limited to specific B2B relationships. This effectively ring-fences the UK retail market, making it a more stable environment for local consumers.
Crypto staking also comes under the microscope, with new registration requirements for liquid and delegated staking services. Solo stakers and purely interface-based providers, however, are exempt. “Some DeFi nuances still need fleshing out,” Zade acknowledged, emphasizing the need for efficient, tailored compliance rather than blanket restriction. He also raised concerns about proposed credit-card purchase restrictions potentially dampening retail participation in token launches.
Looking Ahead
As the UK edges closer to finalizing these rules—expected to be published in 2026—the crypto world watches with bated breath. The roadmap to greater regulatory clarity could see the UK following in the footsteps of the European Union, which began implementing its MiCA framework last December.
For now, the UK’s ambitious regulatory plan seems poised to shape the future of digital finance. Yet, as with any sweeping change, questions remain. Will the new rules foster innovation or stifle it? Can the UK truly balance rigorous oversight with the dynamism of the crypto world? Only time will tell, but one thing is clear: the UK’s regulatory journey has only just begun.
Source
This article is based on: UK to become ‘safe harbor’ for crypto with new draft rules — Experts
Further Reading
Deepen your understanding with these related articles:
- The SEC Can Learn From the IRS in Making Regulation Simpler for Crypto
- U.S. Congress Braces for Intense Debate Over Crypto Legislation This Summer (openai)
- Crypto Coalition Tells SEC Staking Is ‘Essential Good,’ Not a Security
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
