UK draft rules propose a regulated status for crypto exchanges and stablecoin issuers.
The Treasury will accept technical feedback on crypto rules until May 25, 2025.
The UK aims to align with global crypto standards by regulating trading and stablecoin activity.
The UK government has published consultation documents containing draft legislative proposals to regulate crypto operations. The proposed regulatory framework establishes two specific regulated activities: running a cryptoasset trading exchange and issuing stablecoins. The authorities obtained this power through the Financial Services and Markets Act, which came into effect in 2000.
The legislation establishes an extensive regulatory framework for cryptoasset market operations. Market abuse regulation complements disclosure requirements and methods for listing crypto assets within this regulatory framework. The crypto rules being developed by authorities will align with global industry standards, protecting all market participants and their investors.
Stablecoin Regulation and Exchange Oversight in Focus
The draft rules specify regulations for stablecoin companies and trading platforms. A system of licenses will govern the operation of crypto exchanges within the UK borders, according to official plans. Such standards would impose equivalent regulations to those that maintain traditional financial market providers.
https://twitter.com/CryptoUKAssoc/status/1917262738889285879
The proposed regulatory framework outlines procedures governing the use of stablecoins as a form of payment token. The Treasury believes that well-established regulations will enable digital asset industries to flourish, as stable digital token issuers maintain transparent operations with sufficient capital reserves. The government intends to receive a technical assessment on the draft rules by May 25, 2025.
UK Seeks to Catch Up With Global Crypto Regulatory Efforts
The UK’s regulatory framework emerged following the establishment of similar approaches by other jurisdictions. The European Union created the Markets in Crypto Assets (MiCA) regulation in 2024 to establish standard rules for digital asset services throughout all member nations. Recent changes under the Trump Administration in the United States led to a relaxation of regulatory control and clearance of SEC claims filed against cryptocurrency firms.
According to Rachel Reeves in her position as Finance Minister, the UK government focuses on economic expansion, alongside digital advancement. The British government has introduced this legislation to establish the UK as an attractive destination for digital asset businesses, encouraging them to increase their investments and develop new services.
Reeves expressed her department's intention to work with the United States on proper digital asset adoption methods. During the Innovate Finance Global Summit, she presented her message while the UK demonstrated its commitment to working with overseas partners in developing functional crypto standards.
The government website update states that the Treasury will publish new regulations concerning admissions in the cryptocurrency market, alongside abuse reporting and disclosure requirements, during the current year. The final versions of these rules might be released this year after authorities review the existing consultation drafts.