UK government to regulate cryptocurrencies

This illustration photograph taken on November 22, 2024 in Istanbul shows physical banknotes and coin imitations of the Bitcoin crypto currency.  (Photo by Ozan KOSE / AFP)

LONDON, United Kingdom — The UK government published on Tuesday draft legislation aimed at regulating cryptocurrencies like bitcoin and ethereum, after the European Union introduced its own framework.

“Crypto exchanges, dealers and agents will be brought into the regulatory perimeter — cracking down on bad actors while supporting legitimate innovation,” the finance ministry said in a statement.

“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 added.

The new regime comes after the introduction of the European Union’s Markets in Crypto-Assets Regulation (MiCA), which came into force in December.

READ: EU states approve world’s first comprehensive crypto rules

But finance minister Rachel Reeves stressed that the UK was in talks with the United States on the issue, adding that “regulation must support business, not hold it back”.

International cooperation sought

Speaking at a fintech summit in London, Reeves said international cooperation on the sector was vital.

She said she had discussed “continued US and UK engagement” with US Treasury Secretary Scott Bessent last week.

This would include further dialogue at the UK-US financial regulatory working group in June “to support the use and responsible growth of digital assets”.

Around 12 percent of UK adults own or have owned cryptocurrencies, compared to just 4 percent in 2021.

READ: Britain proposes regulation of all crypto assets

Last November, the UK Financial Conduct Authority (FCA) also announced that rules on a specific framework for cryptocurrencies would be published by 2026.

At the same time, a broader financial services strategy will be unveiled on July 15, the government announced on Tuesday.

READ: Political support leading to increasing fallout for crypto