Briefly,
- The UK has shared a new draft of legislation for the crypto industry.
- The regulations aim to increase investor confidence and protect consumers.
- By August 2024 approximately 12% (or a little more) of UK citizens had cryptocurrency.
A new draft of legislation published by the UK government is intended to establish clear and modern crypto laws that will give investors more confidence, while also protecting them.
An accompanying 27-page policy document and draft Order 2025 from the Financial Services and Market Act, 2000 highlights new definitions and guidelines for cryptoassets like stablecoins. Acts like operating crypto exchanges and custodying cryptoassets are also brought into regulatory scope.
“Through our Plan for Change, we are making Britain the best place in the world to innovate—and the safest place for consumers,” said UK Chancellor of the Exchequer Rachel Reeves, in a statement. Robust crypto rules will increase investor confidence and support fintech growth, while protecting people in the UK.
This draft was released to check for any errors or oversights. It aims to amend certain orders under the Financial Services and Market Act. Order 2001 is one of them.
Amendements to the Regulated Activities Order, or RAO, seek to define stablecoins, crypto assets and other assets that qualify, to classify these assets as investments of a certain type, and to regulate specific activities related to those assets.
“Under the new rules, crypto exchanges, dealers, and agents will be brought into the regulatory perimeter—cracking down on bad actors while supporting legitimate innovation,” the statement from His Majesty’s Treasury and Reeves reads.
“Crypto firms with UK customers will also have to meet clear standards on transparency, consumer protection, and operational resilience—just like firms in traditional finance,” it adds.
Reeves’ latest draft bill is the result of discussions with U.S. Treasury Sec. Scott Bessent. The pair talked about “greater cooperation on digital securities” between the UK and US, among other things.
A UK Treasury consultation in 2023 detailed possible proposals for crypto assets regulation including stablecoins. The government had confirmed in November that they intended to put those plans into action. In today’s press release, it says, “We will bring forward the final crypto asset legislation, following consultation with the industry, at the earliest possible opportunity.”
In February, the UK presented a new criminal law that broadened powers to seize cryptographic data.
As of August 2024, the UK population is expected to have a crypto-currency ownership of around 12 percent compared with 4% in 2020. Financial Conduct Authority Research.
Andrew Hayward is the editor
