The UK government plans to implement regulations for the cryptocurrency industry similar to those for traditional financial products starting from October 2027. Accordingly, cryptocurrency exchanges and digital asset-related companies will be under the direct supervision of the Financial Conduct Authority.
The UK Treasury recently proposed a legislative bill requiring cryptocurrency-related business operators to adhere to regulatory standards across the financial system. The bill includes extending the applicability of anti-money laundering regulations from existing financial institutions to cryptocurrency service providers. Relevant companies will now have to register with the authorities and become subject to legal supervision and auditing.
So far, cryptocurrencies have been treated separately from traditional financial assets like stocks and bonds. However, with the rapid growth of the digital asset market and the increasing associated risks in recent years, the necessity for regulation has become increasingly prominent. The UK government explained that this move will enhance industry transparency, strengthen investor protection, and also help detect various illegal transactions.
UK Chancellor of the Exchequer Rachel Reeves emphasized: "Regulating cryptocurrencies is a necessary step for the UK to establish its position as a global financial center leading the digital finance era." It is believed that to maintain global competitiveness in the financial sector, it is essential to keep up with the improvement of regulations for emerging industries.
The UK's regulatory approach is closer to the expanded financial regulation model adopted by the United States, rather than creating independent cryptocurrency-specific regulations like the European Union. In fact, the Financial Conduct Authority and the Bank of England are respectively formulating market regulations, particularly the Bank of England has recently released specific regulatory proposals for stablecoins, a type of digital currency.
This trend may become a turning point for the cryptocurrency industry to integrate into the mainstream financial system in the long run. Although it will be accompanied by regulatory burdens in the short term, it is expected to ultimately help expand the trust base and investment scale of the industry.
