Rachel Reeves has announced plans to regulate cryptoassets such as Bitcoin in a bid to make the UK “a world leader in digital assets”.
The Chancellor told a fintech conference on Tuesday that she would “back the builders” as she announced plans to make crypto firms subject to regulation in the same way as traditional finance companies.
The regulations, expected to become law later this year, are intended to support legitimate crypto businesses, but protect customers by introducing new requirements for transparency and consumer protection, according to the Treasury.
Ms Reeves told the conference at London’s Guildhall: “While the UK will always be committed to high international standards, I am determined that our regulatory framework supports economic growth.”
Cryptocurrencies such as Bitcoin have increased in popularity in recent years, with research suggesting around 12% of adults in the UK own or have owned cryptoassets, up from 4% in 2021.
But last month, Financial Conduct Authority chairman Nikhil Rathi warned that the number of young people turning to crypto as their first taste of investment was “not great”.
The announcement follows Ms Reeves’s trip to Washington last month, during which she met her US counterpart Scott Bessent for talks about a potential trade deal.
On Tuesday, the Treasury revealed the pair had also discussed crypto, an important area for some of Donald Trump’s supporters in the tech industry, and agreed to co-operate on transatlantic regulation to support the sector.
Ms Reeves said: “For the UK to be a world leader in digital assets, international co-operation is vital.”
She added that there would be further discussion at a US/UK regulatory working group in June “to support the use and responsible growth of digital assets”.
Nick Price, a crypto and financial services lawyer at legal firm Osborne Clarke, said the Chancellor’s announcement “explicitly aligns the UK with the US approach” to regulating crypto and represented “a divergence” from the EU’s more bespoke regulation.
He added that the proposal was “a simple and straight-forward piece of legislation” that would offer “a great deal of certainty and stability” as well as consumer protection, but said it “remains to be seen” whether it would help growth.
The Chancellor also used her speech to confirm that she would deliver her annual Mansion House speech on July 15, and planned to publish a financial services growth and competitiveness strategy on the same day with fintech as a “priority sector”.
