On April 29, 2025, HM Treasury published a bill up to the final establishing a regulatory regime for financial services for cryptocurrency in the United Kingdom, as well as a political note explaining the provided for the provided for the provided for the legislation of the legislation. The legislation implements many HM Treasury proposals in its October 2023 article. It marks an important step in the regulation of cryptocurrency in the United Kingdom, which introduced them into the regulatory perimeter for financial services. Below, we give an overview of the key points of the bill and policy note.
The bill presents:
(i) the issue of British stablescoins; And
(ii) traffic, childcare arrangements, exploitation of a platform and organization of transactions in “qualified cryptocurrency”
As regulated activity under the 2,800 law on financial services and markets (regulated activities) 2001.
This means that companies wishing to undertake these activities must be authorized and regulated by the UK Financial Conduct Authority (FCA), although for “eligible stables”, the new regime will only apply to British issuers. The approach adopted in the bill is an extension of the current British regulatory framework for traditional financial services. Similar to the cryptocurrency regulation markets in the EU, the United Kingdom adapts the same set of regulated activities for cryptocurrency.
Decentralized financial models which are really decentralized will be excluded from the requirement to request authorization. The FCA will evaluate if there is a sufficiently controlling part which should be subject to the authorization requirements.
The rules will impose a strict regulatory perimeter around most cryptographic activities in the United Kingdom. The modifications made to article 418 of the law 2000 on financial services and markets will require an entity authorized by the United Kingdom (which can be an intermediary) for most cryptographic activities targeting British consumers. Crypto companies abroad dealing exclusively from British institutional customers will not need authorization, provided that these institutions are not intermediaries for consumers. The position is different for “qualification stables” – only the British issuers there will be captured by the British perimeter.
To imply the regulatory framework, the term “qualified cryptocurrency” is defined in a way that allows flexibility to capture relevant tokens even in the event of technological change. The term also excludes assets already covered by other regulations, such as electronic money and token titles, and therefore confirms a clear separation between these assets. In addition, the “stable qualification” are defined as a subset of “qualification cryptocurrency” and explicitly distinguished from token deposits. There are also technical extinguishes for stablescoins in definitions linked to alternative investment funds and collective investment plans. This once again guarantees that there is a clarity on the treatment of stablecoins in the British regulatory diet. In addition to the fact that in relation to the new activity of “delivering eligible stablecoins”, the stablecoins are largely treated in the same way as the other qualified cryptocurrency as part of the new regulated activities.
A transitional regime will be implemented to allow existing cryptographic companies to adapt to new regulatory requirements. Companies will have a period to request the necessary authorizations and those who do not guarantee authorizations will have to finish their operations in order.
The draft legislation does not deal with certain other key questions, which are the delivery of the FCA. These include:
- The possibility of paying interest or offering incentives on stablecoins.
- Direct redemption requirements of stablescoins of their transmitter.
- Eligible assets to support stablescoins.
HM Treasury also notes that he will publish statutory provisions relating to abuse and admission and disclosure regimes of the cryptoassets market in due course.
HM Treasury considers that the policy set out in the policy note is settled. Technical comments on the statutory instrument project can be made until May 23, 2025, providing a short window for comments. This strengthens the British government’s intention to move quickly to introduce the start of the new regime. HM Treasury intends to legislate by the end of this year, subject to parliamentary time. The gradual approach to the legislation between the law enters into force includes the granting of regulatory power to regulators, which allows regulators to start accepting approval requests and applying complete provisions after a transition period so that inherited companies are approved or wandering.
Companies involved in cryptographic activities in the United Kingdom should prepare for upcoming regulatory changes and consider submitting any relevant technical comments on the IC project within the specified period. We will continue to monitor developments and provide updates as the legislation progresses.
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