The UK government has proposed new regulations for cryptoassets to protect consumers and foster growth in the fintech sector. The draft legislation, revealed during UK Fintech Week, aims to regulate exchanges and dealers, enhancing investor confidence. With consumer ownership of crypto rising significantly, the government is acting to prevent scams while promoting responsible innovation. Discussions with US counterparts are underway to further support the digital asset market.
New Cryptoasset Rules: A Step Towards Consumer Protection and Growth
The UK government has proposed new regulations aimed at enhancing the cryptoasset market while safeguarding consumers. During a significant summit in London, marking UK Fintech Week, the Chancellor announced the draft legislation, which seeks to protect enthusiastic investors from scams and fraudulent firms. Currently, approximately 12% of UK adults engage with crypto, a notable rise from just 4% in 2021.
The incoming rules will require firms dealing with cryptoassets like Bitcoin and Ethereum to comply with clear regulations. This includes bringing crypto exchanges, dealers, and agents into a regulatory framework similar to traditional financial entities. With this regulatory perimeter, the aim is to discourage malicious practices while encouraging trustworthy innovation in the industry.
Chancellor Rachel Reeves highlighted that these changes are part of a broader strategy, dubbed the Plan for Change, to position the UK as a leading hub for fintech while providing a safe environment for consumers. Under the new rules, every firm targeting UK’s customers must adhere to principles regarding transparency and consumer safety, significantly reducing the chances of financial abuse.
Moreover, discussions with US officials are underway. The UK and US will leverage their upcoming Financial Regulatory Working Group to explore collaborative tools for promoting responsible digital asset growth. Notably, conversations between Chancellor Reeves and Scott Bessent, the US Treasury Secretary, addressed the potential for a transatlantic sandbox — an innovative space for testing new digital securities.
Reeves was quoted saying that robust measures around crypto will not only strengthen investor confidence but also bolster the fintech industry’s growth in the UK. “Today’s announcement communicates a clear message: Britain welcomes business but rejects fraud and instability,” she added.
In addition, the Chancellor plans to unveil a Financial Services Growth and Competitiveness Strategy on 15 July, coinciding with her Mansion House speech. This initiative aims to reinforce the long-term viability of the financial sector, with fintech highlighted as a priority.
Engagement with the industry regarding the draft legislation will be sought before the government moves to finalise it. The broader aim is to firmly establish the UK as a global leader in digital assets, integrating security and innovation into the economic landscape. As the government pushes forward, they remain committed to making the country a trusted environment for crypto ventures.
For those interested in diving deeper, the draft legislation along with a policy explainer was made available, outlining the regulatory approach in detail.
