UK Set to Become a ‘Safe Haven’ for Crypto with New Draft Regulations — Experts
On April 29, UK Finance Minister Rachel Reeves introduced a plan for a “comprehensive regulatory regime” designed to position the country as a global leader in digital assets.
According to the proposed regulations, crypto exchanges, dealers, and agents will be treated similarly to traditional financial institutions, necessitating transparency, consumer protection, and operational resilience, as stated by the UK Treasury in a recent statement.
The announcement reveals that the Financial Services and Markets Act 2000 (Cryptoassets) Order 2025 will create six new regulated activities, including crypto trading, custody, and staking.
Unlike the lighter regulatory approach seen in the EU’s Markets in Crypto-Assets (MiCA), the UK is implementing full securities regulations for crypto, as noted by UK law firm Wiggin. This includes requirements for capital, governance standards, rules against market abuse, and obligations for disclosure.
“The UK’s draft crypto regulations are a significant advancement toward establishing a rules-based digital asset economy,” stated Dante Disparte, chief strategy officer and head of global policy at Circle, to Cointelegraph. “By demonstrating a commitment to regulatory clarity, the UK is positioning itself as a safe harbor for responsible innovation.”
Disparte further emphasized that the suggested framework could deliver the predictability necessary to “scale responsible digital financial infrastructure in the UK.”
Source: MiCA Crypto Alliance
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UK’s New Crypto Rules Are “Net Positive”
Vugar Usi Zade, COO of Bitget exchange, expressed positive sentiments about the new regulations, asserting that they represent “a net positive” for the industry.
“Many companies hesitated to enter the UK or left due to uncertainty around what activities, products, and operations required FCA authorization. The new definitions of ‘qualifying crypto assets’ will clarify which activities—trading, custody, staking, or lending—require FCA approval,” he explained.
For exchanges like Bitget, the draft regulations will necessitate full approval from the Financial Conduct Authority (FCA) to provide crypto trading, custody, staking, or lending services to users in the UK.
The rules also afford firms two years to adapt their systems, including capital and reporting requirements. “Aligning each service with the new framework adds compliance overhead, but this clarity enables us to plan product rollouts and invest in local infrastructure,” Zade noted.
Additionally, the new draft regulations classify stablecoins as securities rather than e-money. Consequently, UK-issued fiat-backed tokens must adhere to prospectus-style disclosures and redemption protocols. Non-UK stablecoins may still operate, but only through authorized venues.
Zade argued that excluding stablecoins from the Electronic Money Regulations 2011 (EMRs), thereby keeping them outside the e-money regulatory sandbox, might impede their use for payments.
However, Disparte, whose company issues USDC (USDC), the world’s second-largest stablecoin by market cap, stated that predictability is crucial for sustainable growth in the UK. “What matters is having a stable framework that allows firms to build, test, and grow responsibly—free from arbitrary enforcement or changing regulations. If achieved, this could represent a turning point in the UK’s digital asset landscape.”
Related: UK regulator moves to restrict borrowing for crypto investments
UK to Require FCA Approval for Foreign Crypto Firms
One of the most significant changes in the new draft rules is their geographical scope. Non-UK platforms serving retail clients in the UK will be required to obtain FCA authorization. The “overseas persons” exemption will only apply to specific B2B relationships, effectively isolating the UK retail market.
Crypto staking will also fall under regulation. Liquid and delegated staking services must now register, whereas solo stakers and purely interface-based providers are exempt. New custody rules will extend to any setup granting unilateral transfer rights to a party, including certain lending and multiparty computation (MPC) arrangements.
“Some nuances in DeFi still need to be clarified, but the focus is on efficient, tailored compliance rather than broad restrictions,” Zade remarked.
He added that the broadly defined “staking” category might inadvertently encompass non-custodial DeFi models lacking a central provider. “Proposed restrictions on credit card purchases—although intended for high-risk usage—might reduce retail involvement in token launches,” he cautioned.
Additionally, Zade mentioned that bank-grade segregation rules for client assets could impose challenges on smaller DeFi projects. “Final adjustments to the rules will need to alleviate these unintended consequences.”
The FCA plans to finalize crypto rules by 2026, laying the foundation for the new UK regulatory framework. The path toward increased regulatory clarity in the UK may mirror the European Union, which began implementing its MiCA framework in December.
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