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The UK Treasury is preparing new legislation that will regulate cryptocurrency markets in the same way as traditional financial products, with the changes expected to come into force in 2027.
The Guardian has reported that under the plans, crypto firms will be brought fully into the UK’s regulatory perimeter, meaning they will be required to meet strict standards overseen by the Financial Conduct Authority (FCA).
Ministers say the reforms are designed to protect consumers as digital currencies grow in popularity for investment and payments. Until now, cryptocurrencies have not been subject to the same regulatory framework as stocks, shares, or other financial products, leaving investors exposed to higher risks.
The Treasury said the new rules would improve transparency across the crypto industry, boost consumer confidence, make it easier to detect suspicious activity, and strengthen enforcement, sanctions, and accountability.
Crypto businesses such as exchanges and digital wallet providers already need to register with the FCA under money-laundering regulations. The proposed changes would go further by regulating their services in line with other financial products.
Rachel Reeves, the chancellor, said bringing crypto into regulation was essential for the UK’s future as a global financial centre. She said, as reported by the Guardian, “Clear rules of the road will give firms the certainty they need to invest and innovate, while providing strong consumer protections and locking dodgy actors out of the UK market.”
Lucy Rigby, the minister for the City of London, added that the reforms would give crypto firms the clarity and consistency needed to plan for long-term growth in the UK.
The cryptocurrency market has faced renewed volatility amid investor concerns about a potential artificial intelligence bubble and wider financial instability.
Banking industry data published in October showed that money lost by UK consumers to investment scams rose 55 percent year on year, with fake cryptocurrency investments believed to be the most common fraud.
Ministers are also considering plans to ban political donations made using cryptocurrency, citing difficulties in tracing the origin and ownership of digital assets.
The move follows Reform UK becoming the first British political party to accept crypto donations earlier this year. The party says it uses “enhanced” checks, but concerns remain over transparency.
Reform UK recently received £9 million from cryptocurrency investor Christopher Harborne. As reported by the BBC, Fresh Electoral Commission data confirmed that it is the largest single donation ever made by a living individual to a UK political party, giving Reform a significant financial edge ahead of local elections in May.
Christopher Harborne, who resides in Thailand despite being a British citizen, has long been a prominent political donor. He previously contributed millions to the Conservative Party under Boris Johnson and to the Brexit Party, Reform UK’s predecessor, during 2019–2020.
Recently, the United Kingdom introduced the Property (Digital Assets etc) Act, which formally classifies cryptocurrencies, stablecoins, and tokenised instruments as a new category of personal property.
As reported by media outlets, lawmakers say the reform aims to protect consumers, reduce legal uncertainty, and support the UK’s ambition to become a global hub for digital assets. By placing digital tokens in a clearly defined property class, courts and lawyers no longer need to rely on patchwork case law when handling disputes over wallets, private keys, or token transfers.
In May, the UK government unveiled draft legislation aimed at tightening the reins on cryptocurrency operations within its borders. The move signalled the country’s closer cooperation with the United States instead of following the European Union’s approach to digital assets.
