UK regulation of cryptoassets to start in October 2027, finance ministry says

[LONDON] Britain will start regulating cryptoassets from October 2027, the finance ministry said on Monday (Dec 15), rules it hopes will give the industry certainty while keeping out “dodgy actors”.

The new law, which the government will introduce legislation into parliament later on Monday, will extend existing financial regulation to companies involved in crypto, aligning Britain with the US rather than the European Union, which has built rules tailored to the industry.

A draft bill giving effect to regulation has undergone only minor changes since it was published earlier this year, a ministry spokesperson said.

Globally, interest in cryptoassets has surged since US President Donald Trump came to power, promising to embrace the industry, although the price of the largest cryptocurrency, bitcoin, has fallen sharply in recent months after hitting a record high.

The US is pursuing what is perceived by the industry to be a more crypto-friendly approach than Britain, while the European Union’s Markets in Cryptoassets rules took effect in 2024.

Britain has said that it would collaborate with the US on the best approach to digital assets through a “transatlantic task force”.

Finance minister Rachel Reeves said that the rules would provide “clear rules of the road”, strengthen consumer protections and keep “dodgy actors” out of the market.

Natalie Lewis, a partner at Travers Smith, told Reuters she hoped the changes in the final legislation would be “more than minor” as there were “quite a few technical legal problems with the original draft”.

Britain’s regulatory regime for cryptocurrencies is taking shape, with the Financial Conduct Authority (FCA) planning bespoke rules for trading and market abuse, custody and issuance, and the Bank of England (BOE) last month unveiling its proposals for regulating stablecoins, a type of cryptocurrency that are used for everyday payments.

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At the same time, regulators continue to warn about the risks, including that investors in cryptocurrencies should be prepared to lose all of their money.

Both the BOE and the FCA have promised to finalise their rules by the end of 2026.

Daniel Slutzkin, head of UK at crypto exchange Gemini, said firms had “long-awaited regulatory clarity” and could now start preparing to meet the new requirements. REUTERS