UK Government to Unveil Comprehensive Crypto Regulation in 2025
The United Kingdom's Labour Party, having swept into power earlier this year with a historic landslide victory, is preparing to introduce a comprehensive regulatory framework for cryptocurrencies, stablecoins, and staking services. This new framework, set for 2025, aims to unify existing fragmented measures and provide a clear pathway for the UK to establish itself as a global hub for digital assets.
Economic Secretary to the Treasury, Tulip Siddiq, outlined the new administration’s vision during the City & Financial Global Tokenisation Summit in London, according to a recent Bloomberg report.
The forthcoming legislation aims to align the UK’s crypto landscape with global developments, including the EU’s comprehensive Markets in Crypto-Assets (MiCA) regulations.
Unlike the piecemeal approach of the prior Conservative government, Labour’s Keir Starmer administration plans to deliver an overarching regulatory regime in a single phase. Siddiq stated, “Doing everything in a single phase is simpler and just makes more sense,” highlighting the government’s intent to streamline the process and address long-standing legal ambiguities regarding stablecoins and staking services.
Stablecoins will no longer be governed under the existing payment services regulation, with new rules tailored to their unique use cases and characteristics. The government also aims to exclude staking services from being classified as collective investment schemes, alleviating industry concerns over heightened scrutiny.
Competing Globally
The push for regulation reflects the UK’s efforts to remain competitive against the United States, where President-elect Donald Trump has taken a crypto-friendly stance, and the European Union, which has already implemented MiCA. Siddiq acknowledged that delays in establishing a regulatory framework have driven crypto companies to more favorable jurisdictions.
Earlier this year, Labour released a financial services plan emphasizing the UK's potential as a tokenization hub. This vision includes advancing the legal framework around tokenizing financial and real-world assets on blockchain. The Bank of England's Central Bank Digital Currency (CBDC) currently in its design phase – the digital pound – is another cornerstone of the government's strategy, with implementation decisions expected in 2025-2026.
Crypto adoption in the UK has surged, with approximately 2.5 million citizens owning digital assets. Market activity has reached $170 billion in annual volume, supported by over $1.9 billion in venture capital investment in 2022. The anticipated regulations aim to balance consumer protection and financial stability while fostering innovation in blockchain and decentralized finance.
Industry stakeholders hope the new government will build on groundwork laid by the previous administration, including public consultations on stablecoin regulations and financial promotions. Crypto UK, a prominent lobbying group, has encouraged the government to prioritize clarity and capitalize on the sector’s potential to drive job creation and economic growth.