The United Kingdom is positioning itself as a global hub for responsible crypto innovation with a sweeping new regulatory framework. Unveiled by Finance Minister Rachel Reeves on April 29, the draft rules aim to bring cryptocurrency services under the same scrutiny as traditional finance. Under the proposed legislation, crypto trading, custody, staking, and related services will require full approval from the Financial Conduct Authority (FCA).

The draft regulations, introduced through the Financial Services and Markets Act 2000 (Cryptoassets) Order 2025, include six new regulated activities. These cover a wide range of crypto operations, aligning them with securities laws rather than adopting lighter European approaches like MiCA. Market participants will be subject to capital requirements, transparency obligations, and operational safeguards.

Industry leaders see this as a turning point. Dante Disparte of Circle called the regulations a “pivotal moment” for the UK, offering the predictability needed to scale digital financial services responsibly. Bitget COO Vugar Usi Zade welcomed the clarity, saying firms finally know which crypto activities—like staking or lending—require FCA authorization.

Importantly, the rules reclassify stablecoins as securities, not e-money. This means fiat-backed tokens issued in the UK will need to meet disclosure and redemption requirements. Meanwhile, foreign stablecoins can still be offered—but only through licensed platforms.

The territorial scope of the rules is also expanding. Foreign crypto firms serving UK retail clients will now need FCA approval, ending the previous “overseas persons” exemption. The regulations also bring staking into the fold, including liquid and delegated services, though solo stakers are exempt.

The final rulebook is expected by 2026, giving companies a two-year window to comply. While some DeFi-specific details remain unsettled, experts believe the UK’s bold regulatory play could set a global standard for digital asset governance.