UK and US Bridge Crypto Regulation Gaps to Shape Global Standards

The UK and US have established a working group to explore regulatory cooperation on digital assets, aiming to align frameworks for stablecoins and foster innovation while addressing risks. UK Chancellor Rachel Reeves and US Treasury Secretary Scott Bessent convened in September 2025 to discuss coordinated efforts, with a focus on harmonizing rules for stablecoins and digital securities. The initiative, led by the UK–US Financial Regulatory Working Group, seeks to reduce regulatory fragmentation and create a more predictable environment for firms operating in both markets. This collaboration is positioned as a strategic move to attract investment, enhance cross-border market access, and mitigate financial stability risks associated with cryptocurrenciesUK and US Push for Closer Crypto Cooperation Under Reeves and …^[1].

The working group’s agenda reflects divergent regulatory approaches between the two nations. The UK has adopted a cautious stance, emphasizing consumer protection and financial stability, while the US under the Trump administration has pursued a more industry-friendly framework. For instance, the UK’s Financial Conduct Authority (FCA) reported that 12% of British adults hold cryptocurrency, yet many face challenges with banks delaying or blocking crypto-related payments. In contrast, the US has rolled back restrictions like Operation Checkpoint 2.0 and supported the Genius Act to encourage innovation. Advocacy groups in the UK have called for a less restrictive approach, warning that overly cautious policies risk stifling growth and driving firms to the US marketUK and US Push for Closer Crypto Cooperation Under Reeves and …^[1].

Stablecoins are a central focus of the collaboration, with both countries exploring joint standards for reserve requirements, consumer protections, and operational transparency. The UK’s Bank of England previously proposed capping individual stablecoin holdings between £10,000 and £20,000, a move criticized by industry advocates as potentially hindering adoption. The US, meanwhile, has emphasized the role of stablecoins in supporting the dollar’s global dominance, with the Trump administration advocating for policies that prioritize private-sector innovation over Central Bank Digital Currency (CBDC) development. The working group aims to bridge these perspectives, potentially creating a model for global regulatory alignmentUK and US Push for Closer Crypto Cooperation Under Reeves and …^[1].

The initiative also includes plans for a transatlantic digital securities sandbox, modeled after proposals by SEC Commissioner Hester Peirce. This framework would allow firms to test blockchain-based financial services in a controlled environment, addressing concerns about compliance costs and market entry barriers. UK officials highlighted the need to streamline regulatory authorizations, as the FCA’s slow processing times have been cited as a bottleneck for crypto firms. By harmonizing compliance requirements, the collaboration could reduce operational complexity for companies operating in both jurisdictions, particularly in areas like cross-border payments and tokenized assetsUK and US Push for Closer Crypto Cooperation Under Reeves and …^[1].

The potential benefits extend beyond regulatory efficiency. For businesses, aligned rules could lower costs and boost investor confidence, encouraging greater adoption of stablecoins in financial products and settlements. Consumers may also benefit from enhanced protections, such as clearer redemption rights and transparency standards. Additionally, the UK’s push to position London as a post-Brexit fintech hub aligns with its goal of competing with New York’s dominance in digital assets. However, challenges remain, including reconciling the US’s multi-agency regulatory structure with the UK’s centralized oversight model and navigating political pressures on both sides of the AtlanticUK and US Push for Closer Crypto Cooperation Under Reeves and …^[1].

Globally, the UK–US alignment could influence other jurisdictions to adopt similar standards, particularly in Europe and Asia. The European Union’s Markets in Crypto-Assets (MiCAR) regulation, which took effect in late 2024, represents a contrasting approach with stricter bank-like requirements for crypto firms. If the UK and US succeed in creating a harmonized framework, it may pressure other markets to adjust their policies to remain competitive. This could accelerate international cooperation through forums like the G20 and Financial Stability Board, as regulators seek to address cross-border risks and promote a cohesive global approach to digital assetsUK and US Push for Closer Crypto Cooperation Under Reeves and …^[1].

The collaboration underscores the growing importance of stablecoins in the financial ecosystem, with both nations recognizing their potential to transform cross-border payments and decentralized finance. While the Trump administration’s pro-crypto stance contrasts with the EU’s preference for CBDCs, the UK’s alignment with the US signals a strategic shift toward private-sector innovation. As the working group progresses, its success will depend on balancing the need for consumer protection and financial stability with the imperative to foster a dynamic, globally competitive crypto industry.