UK Proposes Plan to Bring Bank-like Regulation to Crypto Companies

Will a new, more transparent framework attract more crypto companies to the UK?

The UK Treasury is set to bring cryptocurrency markets fully under formal regulation by late 2027. According to The Guardian and Reuters, under the proposal, crypto companies would be regulated by the Financial Conduct Authority (FCA) and held to standards similar to banks and traditional investment firms.

According to the UK finance ministry, the framework seeks to strengthen consumer protection while giving crypto businesses long-term regulatory certainty. Chancellor Rachel Reeves said the goal is to improve transparency, make market abuse easier to police, and reinforce London’s ambition to remain a global digital finance hub.

Crypto firms to face bank-style rules under new framework

Under the proposed rules, crypto exchanges, brokers, wallet providers, and stablecoin issuers will be regulated like traditional financial products.

Draft legislation published earlier this year outlines requirements for capital adequacy, governance, disclosures, and market abuse controls. The FCA has also issued consultation papers on asset listings, insider trading restrictions, custody, and staking services.

City Minister Lucy Rigby said consistency is key to attracting global crypto firms and supporting high-skilled job growth, while Reeves emphasized that the reforms aim to protect millions of UK crypto holders without undermining legitimate innovation.

The regulatory push builds on the Property (Digital Assets) Act 2025, which formally recognized cryptocurrencies as property under UK law. Industry groups welcomed the move, noting it provides clearer legal footing for ownership rights, fraud recovery, and enforcement actions that previously relied on court precedent.

Regulators expect to finalize most rules by 2026. The FCA will oversee trading, custody, issuance, and market conduct, while the Bank of England will regulate payment stablecoins. Sterling-backed stablecoins are a priority, with firms now able to test products in an FCA-run regulatory sandbox ahead of full approval.

While some industry participants warn the rules could slow innovation, UK regulators argue the framework is designed to inform investors and reduce systemic risk, not eliminate volatility or speculation.

How Britain’s approach compares to the U.S.

In contrast to the UK’s planned unified regime, the United States has taken a more incremental approach. Oversight is split across agencies: the SEC and CFTC regulate trading and derivatives, while Congress has passed the GENIUS Act to impose federal standards on stablecoin reserves and transparency.

Meanwhile, banking regulators are also integrating digital assets into mainstream finance. In December 2025, the Office of the Comptroller of the Currency conditionally approved five crypto firms, Circle, Ripple, Fidelity Digital Assets, BitGo, and Paxos, as national trust banks, extending banking supervision to stablecoin issuers.

Here’s a quick look at how the UK’s crypto rules compare with the U.S.

With the UK setting clear rules and the FCA and Bank of England finalizing oversight, crypto is moving from a Wild West state to a more structured market balancing innovation and investor protection.