Government moves to fully regulate cryptocurrencies

(Sharecast News) - The UK government is preparing to bring cryptocurrencies fully within its financial regulatory framework, it emerged on Monday, with new legislation due to take effect from October 2027. Under the plans, cryptoassets would be regulated in a similar way to traditional financial products, placing exchanges, brokers and digital wallet providers under the supervision of the Financial Conduct Authority and subjecting them to established standards on transparency, consumer protection and market conduct.

The Treasury said the move was designed to close longstanding gaps in oversight as crypto usage has grown, while improving the ability of authorities to detect suspicious activity, enforce sanctions and hold firms accountable.

Chancellor Rachel Reeves said bringing crypto into the regulatory perimeter would provide "clear rules of the road" for firms to invest and innovate, while strengthening protections for consumers and excluding "dodgy actors" from the UK market.

The new regime would extend existing financial regulation rather than adopt a bespoke crypto rulebook, aligning the UK more closely with the United States and contrasting with the European Union's Markets in Cryptoassets framework, which took effect in 2024.

A draft bill had reportedly undergone only minor revisions since it was published earlier this year, and the government has said it would work with US counterparts through a transatlantic taskforce on digital asset policy.

Regulators are apparently already laying the groundwork ahead of 2027.

The FCA is developing detailed rules covering crypto trading, custody, issuance and market abuse, while the Bank of England has outlined proposals for regulating stablecoins used in everyday payments.

Both bodies aimed to finalise their frameworks by the end of 2026, giving firms time to prepare for the new requirements.

The regulatory push followed a sharp rise in crypto-related investment scams and high-profile criminal cases.

Ministers were also considering banning political donations made using cryptocurrency, citing concerns over transparency and the difficulty of verifying the origin and ownership of digital assets.

Reporting by Josh White for Sharecast.com.