The UK’s much-anticipated crypto regulations will be finalized by 2026 and go live by October 2027. According to Finance Minister Rachel Reeves, the new frame would be,
“Provide clear rules of conduct, strengthen consumer protection and keep dubious players out of the market. »
The new legislation, which is due to be presented to Parliament on December 15, will build on a draft proposal published earlier this year.
According to the ministry spokesperson, the regulations have only undergone minor changes and will extend the current financial regulations to cryptocurrencies.
Additionally, it will align with US crypto laws rather than the European Union’s Market in Crypto Assets Regulator (MiCA) guidelines.
Mapping UK Crypto Regulatory Efforts
In October 2023, the ministry submitted a proposal to regulate crypto assets and stablecoins. The government approved rules covering the issuance of stablecoins, crypto exchanges and disclosure standards.
These measures aimed to reduce market abuse.
The proposal opened a public comment period for stakeholders until May 2025. Between May and July, regulators collected additional comments focused on the stable rules.
They also held other consultation sessions during this period.
In Q4 2025, UK regulators published draft crypto guidelines. The Bank of England and the Financial Conduct Authority led the process.
The guidelines covered stablecoins, DeFi, and other crypto segments.
As a result, it opened a window for stakeholders to submit comments on the draft proposal by May 2025. Between May and July, it also solicited comments on the stablecoin rules and conducted more consultations.
Stablecoins vs DeFi Rules
United Kingdom stablecoin rulesfor example, were modeled on the US GENIUS Act, but with much stricter holding limits to protect against capital flight from traditional systems.
Individuals can hold up to £20,000 per “systematic stablecoin”, while businesses can hold up to £10 million. Only 60% of reserves can earn interest on the UK’s short-term government debt.
In contrast, the United States has no detention limits; However, interest-bearing stablecoins have been a controversial issue. Additionally, issuers can earn up to 100% on their stablecoin reserves via Treasuries.
Critics, such as Stani Kulechov, CEO of Aave, have said that the bare interest earning potential could make stablecoins based on the British pound (GBP) uncompetitive.
However, other recent UK guidelines, such as Tax-free DeFi activities and treat Bitcoin (BTC) and other crypto assets as propertywere well received by the industry.
In fact, Kuleshov greeted tax-free DeFi as a “win” for the growing sector.
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That said, final comments and guidelines from regulators are expected to be finalized by the second half of 2026, allowing the new crypto regime to start in 2027.
Final Thoughts
- The UK government has reaffirmed its commitment to having a clear crypto regulation regime in place by 2027.
- Some of the proposals, such as stable caps, have encountered opposition.
