The United Kingdom is preparing a major shift in its approach to cryptocurrencies. The government plans to extend existing financial laws to cover crypto firms starting in October 2027. The goal is to strengthen consumer protection, provide clearer rules for the market, and reinforce the UK’s position as a global financial hub in the digital era.

Cryptocurrencies under FCA supervision

According to The Guardian and Reuters, the UK government is set to present draft legislation that would bring cryptocurrencies under the existing financial markets framework. Oversight would be handled by the Financial Conduct Authority (FCA), the same regulator supervising banks, investment firms, and stock exchanges.

Until now, crypto companies in the UK have only been required to register with the FCA, with supervision focused mainly on anti-money laundering risks. The new law would place cryptocurrencies on the same footing as traditional financial instruments such as stocks and bonds.

“A key step for the digital economy”

Chancellor of the Exchequer Rachel Reeves described the reforms as a crucial step for the future of the UK’s financial sector. “Bringing cryptocurrencies into the regulatory framework is essential for maintaining the UK’s status as a global financial leader in the digital age,” she said.

Clear rules, Reeves added, would provide businesses with certainty to invest and innovate, support high-skilled jobs, and strengthen protections for millions of consumers while keeping bad actors out of the market.

Draft legislation already in place

The Treasury published a draft proposal in April aimed at bringing crypto exchanges, dealers, and intermediaries into the regulatory perimeter. According to a Treasury spokesperson cited by Reuters, only minor changes have been made since then.

The legislation would subject crypto firms to the same standards and safeguards as traditional financial institutions, increasing consumer protection while raising compliance requirements for companies operating in the sector.

Alignment with the US and global ambitions

The UK is also seeking alignment with the United States, which is preparing its own legislation to divide oversight of cryptocurrencies among market regulators. In September, the two countries formed a joint working group to explore cooperation on crypto regulation.

Treasury Economic Secretary Lucy Rigby told the Financial Times that the law represents a milestone. “Our ambition is for the UK to lead the world in the adoption of digital assets,” she said, stressing that the rules must support growth and investment while protecting consumers.

Stablecoins and central bank involvement

The new law forms part of a broader regulatory roadmap. The FCA recently outlined plans to finalize rules for stablecoins, trading platforms, and decentralized finance (DeFi) by the end of 2026.

The Bank of England has also proposed its own framework for stablecoins, though critics argue it could restrict innovation and weaken the UK’s competitiveness.

What it means for everyday crypto users

If approved, the reforms will significantly reshape the UK crypto market. For investors, they promise greater safety and clarity. For companies, they mean higher costs but also increased trust and a more stable regulatory environment.

Sources:

https://www.reuters.com/sustainability/boards-policy-regulation/uk-regulation-cryptoassets-start-october-2027-finance-ministry-says-2025-12-15/

https://www.ft.com/content/ad394659-4004-40be-a2a5-76271dd8371c