The proposed legislation will bring cryptoassets into the full scope of UK financial services regulation and enable the UK’s future cryptoasset regime.
By Stuart Davis and Gabriel Lakeman
On 29 April, UK Chancellor Rachel Reeves unveiled draft legislation aimed at regulating cryptoassets at the International Fintech Growth Summit (IFGS) in London, sponsored by Latham & Watkins.
The proposed legislation will bring cryptoassets (including stablecoins) and cryptoasset-related activities in scope of the UK regulatory perimeter, providing the fundamental legislative framework for the UK’s future financial services regime for cryptoassets. When implemented, firms issuing stablecoins, operating cryptoasset trading platforms, and providing custody, brokerage, or dealing services will require full authorisation to conduct activity in the UK.1
The Chancellor’s announcement provides a clear signal that the UK government is seeking to prioritise fintech and establish the UK as “open for business” as part of its growth agenda. The new rules provide significant further detail as to the UK’s approach — particularly on issues such as the territorial scope of the UK regime, as well as an indication of the UK’s policy approach to areas such as crypto-lending and defi — and will supersede the existing UK VASP registration regime. As such, they provide welcome clarity to the market as firms prepare to comply with the UK’s incoming cryptoasset regime.
The legislation remains subject to technical consultation until 23 May 2025, following which we can expect increasing regulatory activity as UK regulators continue to consult on detailed regulatory rules during 2025.2