The Government has published draft legislation for bringing crypto assets into the regulatory perimeter.

Under the new rules, crypto exchanges, dealers and agents will be brought into the regulatory perimeter.

Crypto firms with UK customers will also have to meet similar standards on transparency, consumer protection and operational resilience as other firms regulated by the FCA.

The draft legislation was announced by Chancellor Rachel Reeves to coincide with UK Fintech Week.

The final version of the crypto asset legislation will be brought forward by the Government “at the earliest opportunity” following feedback on the draft from the industry.

The Chancellor also shared that the UK and US will use the upcoming UK-US Financial Regulatory Working Group to focus on the responsible growth of digital assets.

Chancellor Rachel Reeves said: “Through our Plan for Change, we are making Britain the best place in the world to innovate — and the safest place for consumers. Robust rules around crypto will boost investor confidence, support the growth of fintech and protect people across the UK.”

The Government plans to publish its first Financial Services Growth and Competitiveness Strategy on 15 July, along with the Chancellor’s Mansion House speech.

The FCA published a roadmap of key dates for the development and introduction of the UK’s crypto asset regime in November.

Erin Sims, financial services senior analyst at RSM, said that the new legislation should being greater clarity to the market.

She said: "Until now, the UK’s regulatory approach to crypto has been largely reactive, focused on anti-money laundering (AML) registration and limited oversight by the Financial Conduct Authority (FCA). The fragmented system has struggled to keep pace with the explosion in digital asset use and the equally rapid rise in fraud. Crypto fraud accounted for 66% of all investment fraud reported in the UK last year, a 16% increase from the previous year. 

"By requiring crypto firms to be licensed and registered with the FCA, and holding companies accountable through enhanced enforcement powers, the government is laying the groundwork for a safer, more trustworthy digital asset ecosystem. Critically, the legislation also introduces improved investor protection mechanisms, allowing victims of misconduct clearer avenues for redress."

The regulator’s latest research on consumer attitudes and behaviours towards crypto revealed that 12% of UK adults now own crypto, up from 10% in previous findings.

Awareness of crypto has also risen, climbing from 91% to 93%. The average value of crypto held by people increased from £1,595 to £1,842.

Respondents told the FCA that information from family and friends was the most common source of information for those who had never bought crypto. Only 1 in 10 people say they did not do any research before buying crypto.

Around a third of people said they believed they could raise a complaint with the FCA if something went wrong and were seeking recourse or financial protection.