UK to Tighten Crypto Oversight as FCA Plans Final Guidelines by 2026

The UK government published draft rules for the crypto sector on Tuesday as it seeks to tighten oversight on digital assets while boosting innovation and investment.

The proposed legislation introduces new regulated activities, such as running crypto exchanges and issuing stablecoins, and covers market abuse, asset listings, and disclosure requirements. The move builds on the Financial Services and Markets Act passed in 2023, which gave the Treasury more authority to regulate digital assets.

Finance Minister Rachel Reeves, speaking at the Innovate Finance Global Summit, said the updated rules are part of a broader push to support economic growth and establish the UK as a key destination for digital asset firms. Reeves also noted plans to work closely with the United States to “encourage responsible development of the crypto industry.”

The Treasury is seeking technical feedback on the draft regulations until May 25, with final rules on market integrity and disclosures expected later this year.

The UK has been playing catch-up with the European Union, which launched its Markets in Crypto-Assets (MiCA) framework last year. Meanwhile, in the U.S., regulatory pressures on crypto firms eased somewhat under the Trump administration.

Industry groups responded positively to the UK’s announcement. Ian Silvera of CryptoUK called the move “a big victory” for crypto businesses but pointed out that further clarity is still needed, especially around areas like liquid staking and decentralized finance (DeFi).

Although Britain first announced ambitions to become a global crypto hub back in 2022, Silvera noted that progress has been gradual. However, with crypto ownership among UK adults rising from 4% in 2021 to 12% today, momentum appears to be building.

The Financial Conduct Authority (FCA) is expected to release its final crypto guidelines by 2026, helping lay the foundation for a fully regulated digital asset market in Britain.

The FCA’s register, introduced in 2020 to enforce the UK’s anti-money laundering and counter-terrorism rules, has only approved 51 firms to date—just 14% of all applications. Other approved firms include Coinbase, Kraken, Gemini, and Fidelity.