Firms offering services for cryptoassets like Bitcoin and Ethereum will be subject to new rules laid out by the UK Government in the hope of boosting investor confidence and protecting consumers, while driving sustained economic growth.

At a summit in London to mark UK Fintech Week, the Chancellor, Rachel Reeves, revealed that the government has published draft legislation for regulating cryptoassets, bringing crypto exchanges, dealers, and agents into the regulatory perimeter.

According to the government, this will help regulators crack down on bad actors while supporting innovation, with legitimate crypto firms that have UK customers required to meet clear standards on transparency, consumer protection, and operational resilience, just like firms in traditional finance.

There is clear evidence that more regulation and better legal guardrails are desperately needed, with recent figures from Police Scotland showing a staggering 2,000% increase in cryptocurrency-related crimes over the last six years, with millions in digital assets passing through the hands of criminals.  

The Chancellor’s announcement of fresh regulations for cryptoassets in the UK follows news earlier this month that leading UK blockchain and crypto trade groups had written to the government demanding action to maintain the country’s edge in digital assets.

In an open letter to Varun Chandra, the Prime Minister’s business and investment special adviser at No.10, the UK Cryptoasset Business Council, along with partners including techUK and Global Digital Finance, urged for greater strategic focus and accelerated investment to ensure the UK remains competitive in the digital assets space.

Meanwhile, the UK’s industry body for FinTech, Innovate Finance, has developed a blueprint to make the UK the leading international market for stablecoin, warning that without ‘decisive and urgent action’ the country risks missing out on the opportunity these digital assets represent.

At the same time as making this latest announcement, the Chancellor also revealed that the UK and US will use the upcoming Financial Regulatory Working Group to continue discussions around supporting the use and growth of digital assets across both nations.

This follows discussions in Washington between the Chancellor and the US Treasury Secretary, Scott Bessent, where they discussed opportunities to support businesses to innovate on both sides of the Atlantic. 

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This includes looking at ideas for greater collaboration on digital securities between the UK and US, including proposals put forward by SEC Commissioner Hester Peirce for a transatlantic sandbox for digital securities, building on that already launched by the Bank of England and the FCA.  

“Through our Plan for Change, we are making Britain the best place in the world to innovate — and the safest place for consumers,” said the Chancellor.

“Robust rules around crypto will boost investor confidence, support the growth of Fintech and protect people across the UK.”

According to FCA research from late last year, over seven million people in the UK, 12% of the adult population, now own cryptoassets, however, where the government is hoping to make an impact is with the 27% of people who told the FCA that they would be more likely to invest in cryptoassets if there was better regulation.