Reeves proposes crypto regulation overhaul to align UK with US

Britain’s finance minister Rachel Reeves announced a major shake-up of cryptocurrency regulation on Monday, aiming to bring digital assets under the same rules as traditional finance.

The draft laws will extend the existing financial regulatory perimeter to crypto exchanges, dealers and agents, aligning the UK approach more closely with U.S. standards .  In a statement, the Treasury said that “crypto exchanges, dealers and agents will be brought into the regulatory perimeter, cracking down on bad actors while supporting legitimate innovation”.  Crypto firms serving UK customers will also have to meet clear standards on transparency, consumer protection and operational resilience . 

About 12% of British adults have invested in cryptocurrencies such as bitcoin or ethereum, the government noted .  Reeves said the rules would support growth by giving investors confidence and putting public protections in place.  She also pledged to unveil broader plans for boosting Britain’s financial services sector in her upcoming Mansion House speech.

Economists said the announcement was timely given wider market volatility.  A survey last week found investors wary of September’s global risks, but aligning with U.S. regulations may foster innovation here.  “Under the new rules, crypto activities will finally be subject to oversight like any other finance, helping legitimize digital assets,” one finance expert noted. 

The Treasury’s move follows international concerns over so-called stablecoins and the risk of unregulated crypto entities operating abroad.