UK aligns with US in drafting new crypto regulation

This signals that the UK is looking to adopt a framework similar to that of the United States. The proposals aim to impose transparency, consumer protection, and operational standards on crypto-related businesses operating within the country. 

Under the new rules, companies involved in cryptocurrency exchanges, trading, and related services will be incorporated into the existing regulatory structure. This includes obligations for firms to adhere to established standards designed to limit risks and prevent malpractice. Officials from the UK finance ministry stated that the regulations are intended to support responsible activity in the sector while addressing misconduct.

Alignment with the US over EU

Unlike the European Union’s Markets in Crypto-Assets Regulation (MiCAR), which provides a crypto-specific regime, the UK plans to treat crypto largely within the context of existing financial regulations. This approach more closely mirrors the stance taken by US agencies, which typically categorise digital assets as securities according to Reuters. 

According to officials cited by the same source, the legislation builds on earlier proposals published in 2023 and is expected to be finalised by the end of this year. Representatives from the UK government held discussions with their US counterparts during a recent visit to Washington and plan to continue those conversations in June. 

The proposed laws also include specific provisions for stablecoins, digital tokens intended to maintain a fixed value relative to assets such as the USD. Only issuers based within the UK would fall under the scope of the new rules.  

Around 12% of adults in the UK have had some exposure to cryptocurrencies, according to government figures cited by Reuters, marking a sharp rise from 4% in 2021. Some critics argue that applying formal regulation to the sector could lead consumers to underestimate the risks associated with digital assets, particularly those with little or no intrinsic value.