The UK government has set out plans to introduce a comprehensive regulatory framework for cryptoassets, aimed at encouraging innovation, attracting investment, and enhancing consumer protection as part of its strategy to position the UK as a global leader in digital finance.

Under the proposed measures, cryptoasset firms will be supported in their growth and development through what the government describes as a firm and proportionate regulatory approach. The legislation, scheduled to come into force from 2027, represents a significant step toward aligning cryptoassets with existing regulated financial products such as equities and other securities.

Once implemented, cryptoasset firms operating in the UK will be required to be authorised and supervised by the Financial Conduct Authority (FCA). This will place them under established transparency, conduct, and consumer protection standards that apply across the wider financial services sector. The move is intended to provide greater legal certainty for businesses while strengthening trust and confidence among consumers.

The government said the framework will enhance customer protection by formally bringing cryptoassets within the regulatory perimeter, reducing exposure to financial misconduct and reinforcing safeguards for users of digital assets.

Officials also emphasised that the new regime is designed to support responsible innovation, promote fair and competitive markets, and enable the UK to play a leading role in shaping international standards for cryptoasset regulation.

Chancellor of the Exchequer Rachel Reeves said that incorporating cryptoassets into the regulatory system is a critical step in maintaining the UK’s position as a world-leading financial centre in the digital era.

“By providing firms with clear and consistent regulatory expectations, we are creating the certainty required to support investment, innovation and the creation of high-skilled jobs in the UK, while delivering strong consumer protections and preventing harmful practices from taking hold in the market,” she said.

Economic Secretary to the Treasury Lucy Rigby added that the reforms are intended to establish the UK as a preferred destination for cryptoasset firms seeking long-term growth