UK Introduces Crypto Regulations to Safeguard Investors

The UK government has introduced draft legislation to regulate crypto assets such as Bitcoin and Ethereum, with the goal of safeguarding consumers and enhancing investor trust as the use of cryptocurrencies continues to rise.

Announced during UK Fintech Week by Chancellor Rachel Reeves, the proposed regulations are part of the government's broader Plan for Change initiative. This initiative aims to establish Britain as a leading global center for fintech and responsible digital asset innovation.

Under the new regulatory framework, crypto firms providing services like exchanges, custody, and brokerage for crypto assets will be required to adhere to stringent standards of transparency, consumer protection, and operational resilience. These standards are currently applied to traditional financial institutions.

“Through our Plan for Change, we are making Britain the best place in the world to innovate — and the safest place for consumers. Robust rules around crypto will boost investor confidence, support the growth of fintech and protect people across the UK,” said Chancellor Reeves.

The legislation is designed to address the significant increase in crypto adoption within the UK, where 12% of adults now own digital assets, up from just 4% in 2021. This rapid growth has left many consumers vulnerable to risky, unregulated platforms and scams.

The new rules will, for the first time, bring exchanges and intermediaries handling digital assets under UK regulatory authority. This move will empower regulators to target malicious actors while promoting responsible innovation through clear, enforceable standards.

In addition to domestic reforms, the UK is also strengthening its international regulatory partnerships. Chancellor Reeves announced that the UK is collaborating with the US through the UK-US Financial Regulatory Working Group to support the responsible growth of digital assets.