- The U.K. plans crypto rules aligning with traditional financial sector standards.
- Crypto law completion set for 2025 despite innovation concerns.
The U.K. government has announced a major step toward regulating the cryptocurrency industry. On Tuesday, Finance Minister Rachel Reeves created a thorough regulatory framework that requires crypto companies to comply with financial institution monitoring requirements.
U.K. to Impose Banking-Level Rules on Crypto Firms
During the Innovate Finance summit, Reeves explained that these new standards would affect exchanges and brokers alongside agents who service United Kingdom customers. The organizations serving customers in the United Kingdom must follow established rules that involve operational resilience requirements and consumer protection standards in addition to transparency protocols. These institutions will need to operate under banking-related standards.
Importantly, Reeves highlighted the necessity of multinational organizations working together during his address. The new framework focused on an intensified U.S. and U.K. partnership regarding the proper implementation of digital assets. International partnerships play a vital role for the United Kingdom to achieve its leadership status in digital assets, according to her statement.
The draft legislation intends to transform the United Kingdom into a leading force in digital finance for global markets. The draft legislation strives to establish a global digital financial center by penalizing fraudulent actors in cryptocurrency markets. A document issued by the Treasury indicates that the new regulation helps advance technological innovation, together with consumer protection measures.
Currently, the number of U.K. adults engaging with both Bitcoin and Ethereum reaches approximately 12%. Current cryptocurrency ownership levels in the United Kingdom have reached 12%, up from 4% in 2021. The British population demonstrates increasing fascination with digital assets through statistical data.
The process toward implementing regulation has faced numerous obstacles. A large percentage of crypto industry experts claim that the Financial Conduct Authority (FCA) has adopted an overly restrictive stance towards crypto matters. The Financial Conduct Authority functions as the regulator responsible for verifying crypto enterprises wanting to run business operations under British anti-money laundering protocols. The regulatory process has led several organizations to face rejections in their applications, thus reducing innovation speed.
U.K. Crypto Law Set for Completion by End of 2025
Despite this, government officials maintain their position that strict regulatory measures are essential. One part of the new regulations establishes oversight for stablecoins, which maintain their worth at a steady level. Stablecoin issuers who operate from U.K. premises must follow these regulations, but other issuers remain outside this regulatory system.
Bank of England Governor Andrew Bailey has long warned that cryptocurrencies, especially Bitcoin, are risky. Bitcoin fails to meet its requirements for functioning as traditional money because he does not trust it as a store of value. According to his perspective, stablecoins need both legislation and regulation since they have strong potential in payments.
The government aims to complete its new rules before 2025. The new proposals expand on original plans that appeared in legislation drafts during 2023. Crypto regulation presents the risk that it might create false perceptions that digital assets represent safe investments. The regulations make them fear users will fail to see the dangers correctly.
Despite these concerns, various experts remain behind in supporting the stance of this new legislation. The proposed legislation receives praise from Nick Price, who serves as a crypto law expert at Osborne Clarke, as “simple and straightforward.” He predicted that this move would create stability while providing better protection for consumers, while promoting clarity in the market structure.
The United States and the United Kingdom share parallel views regarding how to classify most cryptocurrency as security assets. MiCAR rules from the European Union provide crypto with specialized regulations, whereas the British system does not.
Lastly, the United Kingdom’s recent change in digital asset management demonstrates an important transformation of its financial treatment of such assets. The government intends to balance innovation against safety goals to establish the U.K. as a leader in digital finance.
The post U.K. to Regulate Crypto Firms Like Traditional Finance appeared first on Live Bitcoin News.