UK Crypto Regulation Set for 2027 Under Full FCA Control
- The UK will bring crypto firms under FCA rules, matching other financial products, by 2027.
- Officials aim to increase transparency, reduce fraud risk, and support innovation in crypto.
- Data shows that about 12% of UK adults hold crypto amid rising scams and market volatility.
The UK will regulate cryptocurrencies like traditional financial products under new legislation due to take effect in 2027. The Treasury plans rules that would place crypto firms under the Financial Conduct Authority’s oversight.
Ministers said the move will align crypto services with existing financial standards. The goal is to improve transparency, strengthen consumer protection, and more easily detect suspicious activity across digital asset markets.
The reform takes place at a time when cryptocurrencies are becoming more popular in the UK. The percentage of the UK adult population that has invested in cryptocurrency is approximately 12%, indicating that the steady adoption of the new financial asset has not been severely affected by recent market volatility and the increasing number of fraud cases.
Treasury and FCA Set Clear Rules for Crypto Firms
The Treasury is working on new regulations that will require crypto exchanges and digital wallet providers to comply with FCA standards. The standards that are being referred to already exist for banks, investment firms, and other financial service providers.
Currently, crypto companies are required to register with the FCA solely for anti-money laundering purposes. Under the new regime, the companies will be subject to broader regulation, which includes the already established transparency and accountability requirements.
According to The Guardian, the ministers believe that the new framework will enhance trust as it also makes enforcement easier. Rachel Reeves, the chancellor, said regulation is vital for the UK’s financial future. “Bringing crypto into the regulatory perimeter is a crucial step in securing the UK’s position as a world-leading financial center,” she said.
She added that clear rules will help firms invest and innovate while protecting consumers. The Treasury echoed this view, saying firms will gain support to grow and attract global investment.
Legal Recognition and Wider Regulatory Plans
In parallel with the regulatory measures, the UK has officially granted Bitcoin and other cryptocurrency assets legal property status. A recent Act of Parliament has allowed digital assets to be owned, passed on, and retrieved. Meanwhile, the FCA is drawing up comprehensive rules for trading, custody, issuance, and market manipulation. Moreover, the Bank of England is proposing a framework for overseeing stablecoins.
Reuters reported that both regulators plan to finalize their frameworks by the end of 2026. These steps aim to align oversight before the main crypto regime takes effect in 2027. Lucy Rigby, the minister for the City of London, said the rules will help firms plan long-term. “We want the UK to be at the top of the list for crypto asset firms looking to grow,” she said.
The Treasury said the regime will support responsible innovation and open markets. It also said the UK aims to shape global standards for cryptoasset regulation through this approach.
Market Impact and Industry Response
The reforms arrive during a volatile period for digital assets. The crypto market has faced turbulence, partly linked to investor fears, including concerns about a possible artificial intelligence bubble.
Related: UK Passes Law Recognizing Digital Assets as Personal Property
UK banking industry data shows money lost to crypto investment scams jumped 55% in one year. This rise has increased pressure on ministers to strengthen consumer safeguards. At the same time, ministers are drafting plans to ban crypto political donations. Officials cited concerns about unverifiable origins and ownership of digital assets used in political funding.
Some crypto companies welcomed the Treasury’s plans. They said precise regulation could attract investors and build trust. Others raised concerns about higher compliance costs and tighter controls. Why does regulation divide the industry when adoption continues to grow?
Discussions quickly spread across social media after the announcement.
A market observer noted the shift signals a new phase for UK crypto markets under closer supervision. The Treasury said the framework seeks balance. It aims to support innovation while ensuring accountability and consumer protection across a rapidly expanding digital finance sector.
