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The UK government will introduce legislation by October 2027 that brings cryptocurrency exchanges, dealers, and agents under the same regulatory framework as traditional banks and investment firms, according to Treasury officials.
The move will place crypto businesses under Financial Conduct Authority supervision with requirements for risk management, consumer protections, and reporting standards comparable to conventional financial institutions.
Treasury head Rachel Reeves called it “a crucial step in securing the UK’s position as a world-leading financial center in the digital age.”
According to Reeves, “By giving firms clear rules of the road, we are providing the certainty they need to invest, innovate and create high-skilled jobs here in the UK, while giving millions strong consumer protections, and locking dodgy actors out of the UK market.”
The draft legislation, first proposed in April, would bring crypto exchanges, dealers, and agents into the same regulatory perimeter as traditional financial products like stocks. A Treasury spokesperson told Reuters that the bill has seen only minor revisions since its initial proposal.
Currently, crypto businesses must register with the FCA, which primarily focuses on anti-money laundering oversight rather than comprehensive consumer protection or financial regulation.
By enforcing the UK crypto law, these companies will be held to standards comparable to banks and investment firms, including risk management and reporting obligations.
The legislation is expected to cover emerging areas such as decentralized finance (DeFi) platforms and stablecoin issuers, aligning with the FCA’s recently released crypto regulatory roadmap, which aims to finalize rules by the end of 2026.
The UK’s approach mirrors efforts in the United States, where lawmakers are considering bills to allocate crypto oversight among multiple federal regulators. A UK-US task force formed in September aims to explore short-to-medium term collaboration on market access and regulatory alignment.
Economic Secretary Lucy Rigby told the Financial Times that the UK crypto law will be “proportionate and fair. They are going to be good for growth, encourage firms to invest here and protect consumers as well. I don’t see any conflict between those things.”
Rigby added that while the rules are designed primarily for the UK, exploring mutually beneficial market access opportunities with international partners “makes sense for the UK.”
The proposed legislation has sparked debate among regulators and lawmakers. Last month, the Bank of England outlined plans to regulate stablecoins, which some lawmakers have criticized as potentially creating a “global outlier” by banning wholesale stablecoin use outside of a sandbox and imposing strict holding caps.
If implemented, the UK crypto law will formalize the regulatory treatment of digital assets, provide clarity for firms seeking to operate legally, and strengthen consumer protections. Analysts believe that the move could also enhance the UK’s competitive positioning in global digital finance while mitigating risks associated with unregulated crypto activity.
The UK government’s legislation represents one of the most comprehensive efforts to date to integrate cryptocurrencies into traditional financial oversight. By extending established finance laws to digital assets, the UK crypto law could set a global benchmark for responsible regulation and market confidence.
