Britain Prepares to Extend Financial Regulation to Crypto by 2027

Jimmy Aki
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The United Kingdom is set to take a clear step toward tighter oversight of the crypto market.

His Majesty’s (HM) Treasury is in the process of drafting a new bill that would place digital assets under the supervision of the Financial Conduct Authority (FCA). The regulation is expected to take effect from October 2027.

Can the Anticipated Bill Protect Consumers Without Stifling Innovation?

According to an exclusive Reuters report, the proposed rules would cover major parts of the crypto industry. This will include exchanges where digital assets are traded and wallets used to store them.

In practice, crypto assets would be treated like other regulated financial products. Firms would need to meet clear transparency, reporting, and consumer protection standards set by the FCA.

Rachel Reeves, the head of the HM Treasury, stated the regulations would protect users and keep bad actors out of the market.

The timing matters. A survey by the FCA showed that 12% of UK adults hold crypto, and the number keeps rising.

As adoption grows, pressure has increased on policymakers to update financial regulation to reflect how people use money today.

This push has already led to change. The UK has formally recognized Bitcoin and other crypto assets as legal property under an Act of Parliament. Under the law, crypto can be owned, inherited, and recovered.

Meanwhile, concerns remain. Critics argue that the upcoming Treasury bill leans too heavily toward consumer protection. Some worry that placing crypto firmly under the FCA could slow innovation, especially given how different cryptocurrency is from traditional finance.

Britain and the U.S. Compete to Become Leaders in Crypto Adoption

The EU rolled out its Markets in Crypto-Assets (MiCA) framework last year. However, it appears that the UK has chosen a different path.

Instead of bespoke legislation, Britain will fold cryptocurrency into existing finance regulation. This aligns more closely with the U.S. approach, where lawmakers are still building crypto rules within financial frameworks.

To support this, the UK announced cooperation with the US through a Transatlantic Taskforce. The goal is to share ideas, align standards, and encourage crypto innovation.

For policymakers, collaboration reduces regulatory gaps. For firms, it lowers friction when operating across borders.

Lucy Rigby, the minister for the City of London, has described the new framework as a milestone.

She has said the UK intends to lead the world in digital asset adoption. In her view, proportionate rules can support growth, attract investment, and protect consumers at the same time.

Recent moves highlighted the UK’s approach towards being a major market for cryptocurrency. On October 8, the FCA lifted its four-year ban on crypto exchange-traded notes for retail investors.

More shifts followed. In late November, the UK proposed a new tax framework for decentralised finance. Under the plan, capital gains tax on crypto lending and liquidity pools would be deferred until users sell their tokens and realise real gains.

Together, these steps show the direction of travel. The UK wants crypto growth and consumer safety. Moreover, the country wants to compete, not fall behind, as the global race for crypto leadership accelerates.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.