Britain set for crypto regulation from 2027 because it seems to be to ‘lead world in digital asset adoption’

The Government is set to launch crypto asset regulation from 2027 in a bid to compete globally and attract investment to the UK.

City minister Lucy Rigby said rule changes would allow the UK ‘lead the world in digital asset adoption’.

The Government is set to announce the regulation later on Monday.

Under new rules, cryptocurrencies such as bitcoin will face similar regulation to other financial products, requiring providers to meet standards set out by the Financial Conduct Authority.

This puts the UK’s regulation in line with that in the US, whereas Europe has built specific cryptoasset regulation.

Rigby told the Financial Times: ‘Bringing forward this legislation is a milestone. Our intention is to lead the world in digital asset adoption.’

She added: ‘The rules we are putting in place are going to be proportionate and fair. They are going to be good for growth, encourage firms to invest here and protect consumers as well.

‘I don’t see any conflict between those things.’

The regulation was first announced in April this year, with draft legislation being set out to protect investors and encourage investment.

From 2027, new rules will make it easier for the Government to find and address suspicious activity.

Cryptocurrency is not currently regulated in the UK, but crypto firms have to register with the FCA under anti-money laundering regulations.

Already, millions of Britons own cryptocurrency, with the number having surged over the past year.

In November last year, the average crypto holding was £1,842, according to FCA, but this has likely increased since then.

Despite this, figures indicate that as many as 72 per cent of people don’t fully understand cryptocurrency, according to WisdomTree.

Dan Moczulski, UK managing director or Etoro, said: ‘The move to bring crypto fully into the FCA’s regulatory perimeter has been a long time coming, but it is a welcome step.

‘Crypto has matured rapidly, yet regulation has not always kept pace, and investors rightly expect the same level of protection they receive when investing in other financial products.

‘At present, regulation only covers certain aspects of crypto, such as promotions, rather than the full investment journey. 

‘For clients, that lack of clarity can undermine confidence. 

‘Investors need to know that crypto is being treated as a fully regulated product if they are to feel comfortable committing capital for the long term.’

Pantelis Kotopoulos, UK country director at Bitpanda, said: ‘We welcome the Government’s commitment to a clear and comprehensive regulatory framework for cryptoassets and support the ambition to deliver proportionate, effective regulation.

‘We are working closely with the UK Government and regulators to ensure that the regulatory regime is fair, balancing protection and innovation to ultimately benefit investors.’

There have been concerns that the UK is falling behind other regions in terms of crypto regulation.

Speaking at the Coinbase crypto forum in October, former chancellor George Osborne said: ‘Britain has missed the boat on crypto and other jurisdictions have taken the lead.’

He said successive governments have failed to deliver legislation ‘time and again.’

Nick Jones, founder and chief executive of Crypto fintech firm Zumo, said: ‘With today’s announcement, momentum is starting to snowball as we head towards 2026 – which will be the year the UK becomes serious about establishing itself as a genuine crypto hub.’