UK Treasury Confirms FCA to Enforce New Crypto Laws Starting 2027

The UK’s Finance Ministry (His Majesty’s Treasury) announced today that Britain will begin regulating crypto in October 2027, allowing digital assets to be subject to regulation in a manner similar to traditional financial products. The government will reveal the new set of standards and rules overseen by the Financial Conduct Authority (FCA) in mid-2026

This move, led by Finance Minister Rachel Reeves, aligns Britain with the approach of the U.S., which underwent a significant transformation during the Donald Trump administration’s pro-crypto regulatory developments. Lucy Rigby, the Economic Secretary to the Treasury of the United Kingdom, stated that bringing forward this legislation is a milestone, and the intention is to lead the world in digital asset adoption.

The new rules are expected to make the crypto industry more defensive against scams, ensuring a safe and secure blockchain experience for citizens. According to Rachel Reeves, clear rules will provide certainty to investors and create high-skilled jobs in the UK. “Bringing crypto into the regulatory perimeter is a crucial step in securing the UK’s position as a world-leading financial centre in the digital age,” she added.

What Changes to Expect as the UK Brings Crypto Firms Under FCA Oversight?

Since the crypto institutions, such as exchanges, custodians, and wallet providers, will fall under the FCA, we can expect full oversight and transparency. The framework will enforce real-time transaction monitoring, enhance the Know Your Customer (KYC) checks, and report suspicious activities immediately. It can be considered a radical shift from the current framework, which only requires the crypto firms to register under anti-money laundering (AML) rules.

According to the banking industry data of October, the amount of money lost due to crypto scams in the UK witnessed a 55% surge this year, and many victims accuse the lack of advanced rules and regulations as a major reason for this. The new rules will likely decrease the crypto-driven crime rate by adding extra layers of protection to customers.

In addition, the framework intends to ban the use of cryptocurrencies for political donations, primarily due to the controversies over the record £9m donation from cryptocurrency investor and aviation entrepreneur Christopher Harborne to Nigel Farage’s Reform Party of the UK. It remains the largest single donation a British political party ever received from a living person.

Bank of England’s Stablecoin Plans Spark Debate as FCA Prepares New Crypto Rules

The FCA and Bank of England (BoE) together could enhance public trust and stability with the new set of rules. The BoE has proposed a stablecoin version of fiat and plans to establish a central bank backstop lending facility for issuers. However, various crypto advocates have different views on this, primarily due to the increased oversight of the BoE.

In a December 11 letter addressed to Reeves, a cross-party group of UK lawmakers has raised concerns over the Bank of England’s proposals to cap stablecoin holdings in the country. According to the group, it could undermine the efforts of the government to position the country as a global leader in crypto.

As the regulatory framework is still not yet disclosed and the BoE hasn’t yet finalized its stablecoin plans, we have to wait for clarity. FCA has announced that it will publish the full finalized version of the framework by mid-2026, and the BoE’s stablecoin proposal is expected after 2026.

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