According to Reuters, the UK Treasury has confirmed its plans to start regulating crypto assets from October 2027. The legislation will subject companies related to cryptocurrencies to existing financial services laws. This will help companies understand the rules and protect themselves from those who attempt to violate them.
The bill was first published in February of this year and has introduced some minor changes since then. The government describes them as technical. However, some lawyers believe that more changes may be needed for the system to function properly.
This plan arises following the approval in July of the first major cryptocurrency law in the United States, the GENIUS Act. British lawmakers claim that their new cryptocurrency law is inspired by that model.
Interest in digital assets has grown since President Donald Trump took office with a favorable stance towards cryptocurrencies. Britain emphasized the need for better cross-border cooperation. It announced plans to collaborate with the U.S. on digital assets and capital markets through a specific working group.
The new regulations in the United Kingdom primarily aim to keep pace with the growing widespread adoption. Earlier this month, the UK formally recognized digital assets as property under national legislation following the royal assent of the cryptocurrency bill. This change places cryptocurrencies and stablecoins in a legal situation similar to that of more traditional assets.
In addition to the new bills regarding the market, the government is considering banning political donations made through cryptocurrencies and establishing new market regulations. Ministers are concerned about the lack of transparency and the difficulty in tracing the origin of these donations. This proposal adds to the current debate on regulations.
Meanwhile, Finance Minister Rachel Reeves stated that the proposed new law would establish clear standards. Additionally, it would increase consumer protection and prevent unreliable actors from taking advantage of regulatory loopholes.
Additionally, the Bank of England will develop specific regulations regarding trading centers and market abuse prevention. It has also proposed regulations affecting stablecoins used in daily payments. Both the Bank and other regulators intend to finalize these rules by the end of 2026.
Banks in the United Kingdom have reported that losses from cryptocurrency-related investment scams increased by 55% compared to the previous year. This is an example of the risks to consumers that, according to regulators, must be addressed.
