The UK government will extend its financial rulebook to the cryptocurrency sector, requiring exchanges, wallet providers, and related businesses to register with the Financial Conduct Authority by 2027.
The Treasury confirmed plans to bring digital assets under the same regulatory perimeter as traditional financial products, creating one of the most comprehensive crypto oversight regimes among major economies.
“This framework will give investors confidence, tackle illicit finance, and ensure innovation takes place within clear rules,” a Treasury spokesperson said. “Our approach balances competitiveness with consumer protection.”
Under the proposals, companies handling crypto assets — from trading platforms and custodians to stablecoin issuers — will need formal authorisation and must meet transparency, conduct, and anti-money-laundering standards. The Financial Conduct Authority will act as the primary regulator, with the Bank of England overseeing systemic risks linked to stablecoins.
The new rules are due to take full effect in October 2027, following a phased rollout of legislation and secondary rulebooks. Draft laws are expected to reach Parliament early next year, with FCA consultations on market conduct and consumer safeguards running through 2026.
The measures mark the UK’s most significant step yet toward integrating digital assets into mainstream financial supervision. They build on a 2025 Treasury consultation that sought to extend the Financial Services and Markets Act 2000 to cover crypto-related activities, rather than creating an entirely separate regime.
City minister Lucy Rigby said the plan underscored the government’s goal of keeping London competitive. “By providing clarity and high standards, the UK can lead the world in responsible crypto innovation,” she told the Financial Times.
Industry reactions have been mixed. Larger players and law firms have welcomed the long-awaited regulatory clarity, saying it will open the door to institutional participation. Others caution that the compliance burden could deter smaller innovators and push some activity offshore.
Legal analysts note that the FCA’s expanded remit will introduce market-abuse rules, disclosure requirements, and consumer recourse mechanisms similar to those in equities and derivatives trading. Stablecoins used for payments will face particular scrutiny, with safeguards designed to ensure full backing and operational resilience.
The Treasury’s move follows growing pressure to protect consumers after a string of high-profile frauds and exchange failures. It also aligns the UK with the EU’s Markets in Crypto-Assets (MiCA) framework, which came into force in 2024.
While the reforms may take several years to implement, financial stability experts say they will reduce regulatory arbitrage and make the UK a more predictable environment for digital-asset businesses.
For investors, the result could be a more transparent and less volatile marketplace — though the sector’s response will depend on how flexibly the FCA applies its new powers in practice.
