Chancellor Rachel Reeves announced regulatory plans for cryptoassets, aiming to establish the UK as a leader in the sector. Regulations expected this year will mirror traditional finance rules, focusing on supporting legitimate firms and enhancing consumer protections. The discussions on international cooperation with the US suggest further developments in the crypto landscape. The Treasury is prioritising fintech in its growth strategy with key announcements set for July 15.
Rachel Reeves has revealed plans to regulate cryptoassets, including Bitcoin, aiming to position the UK as a leader in the digital assets sphere. Speaking at a fintech conference on Tuesday, the Chancellor emphasised her commitment to supporting crypto firms with regulations that mirror those of traditional finance entities. The forthcoming regulations are designed to bolster legitimate businesses while ensuring enhanced transparency and consumer protection for users, in line with Treasury’s objectives.
During her address at London’s Guildhall, Ms Reeves noted, “While the UK will always be committed to high international standards, I am determined that our regulatory framework supports economic growth.” This statement underscores her intention to balance regulation with the need for innovation in the rapidly evolving crypto market. Research indicates that approximately 12% of UK adults currently own or have previously owned cryptoassets, a significant increase from just 4% in 2021.
However, the growing popularity of cryptocurrencies brings concerns. Just last month, Nikhil Rathi, chairman of the Financial Conduct Authority, cautioned against the number of young individuals turning to crypto investments as a starting point. The situation raises questions about financial literacy and the risks involved in volatile markets.
The timing of this announcement coincides with Ms Reeves’s recent trip to Washington, where she discussed a potential trade deal and, notably, crypto regulations with US counterpart Scott Bessent. Their talks underscored a mutual interest in fostering transatlantic regulatory cooperation to advance the crypto sector, which has garnered attention from various political factions in the US, including supporters of Donald Trump.
Ms Reeves highlighted the importance of international collaboration, stating, “For the UK to be a world leader in digital assets, international co-operation is vital.” Looking ahead, she mentioned further discussions slated for June at a US/UK regulatory working group aimed at promoting responsible growth in digital assets.
The Chancellor also announced plans to deliver her annual Mansion House speech on July 15. She intends to launch a financial services growth and competitiveness strategy, signalling a focused approach on fintech as a key priority in the UK’s economic landscape. With these actions, it seems the government is preparing to embrace the burgeoning digital asset ecosystem while trying to mitigate its risks.
