The Financial Conduct Authority (FCA) of the United Kingdom is actively soliciting public opinions on critical elements of the cryptocurrency industry, such as staking, lending, borrowing, intermediaries, and decentralized finance (DeFi).
This outreach was announced on Friday through a discussion paper that forms part of a comprehensive initiative to refine the forthcoming regulatory framework for cryptocurrencies in the UK.
UK Treasury Proposes Legislation to Extend FCA Authority
This initiative aligns with the recent draft legislation from the UK Treasury, unveiled earlier this week, which aims to extend the FCA’s oversight to specific cryptocurrency-related activities.
Upon approval, the proposed legislation will empower the FCA to regulate various sectors, including cryptocurrency exchanges, stablecoin issuance, and DeFi platforms.
“The crypto industry is expanding rapidly. Currently, it operates in a largely unregulated environment. We aim to establish a regulatory framework that provides clarity for firms, enabling them to innovate safely, while ensuring adequate market integrity and consumer protection,” stated David Geale, Executive Director of Payments and Digital Finance at the FCA.
This initiative is part of a broader government strategy on cryptocurrency that builds upon the Financial Services and Markets Act passed in 2023, which granted the Treasury the authority to establish new regulations pertaining to digital assets.
The UK is making strides to align itself with the European Union, which enacted its Markets in Crypto-Assets (MiCA) framework in 2023.
@TheFCA is inviting input on how the unique features of cryptoassets should be integrated into the UK’s forthcoming regulatory framework. This involves discussions about the characteristics of the future regime, with the latest Discussion Paper seeking opinions on the regulation of trading… pic.twitter.com/52F91VYUIT
— The British Blockchain Association (@Brit_blockchain) May 2, 2025
In contrast, the U.S. has moderated its stance under former President Donald Trump, with the Securities and Exchange Commission halting lawsuits against a number of cryptocurrency firms.
Finance Minister Rachel Reeves has reiterated the government’s dedication to cultivating a competitive landscape for digital assets.
During her remarks at Innovate Finance’s Global Summit, Reeves highlighted that the forthcoming regulations aim to establish the UK as a premier destination for innovation and investment in the crypto sector.
Additionally, she underscored plans for collaboration with U.S. authorities to promote responsible digital asset development.
The Treasury is currently seeking technical comments on the draft legislation until May 25 and is expected to provide further details regarding rules concerning market abuse, disclosures, and asset admissions in the upcoming months.
UK Trade Bodies Call for Dedicated Crypto Envoy
A letter sent to Varun Chandra, Starmer’s special adviser on business and investment, from six UK digital economy organizations emphasized the necessity for enhanced strategic cooperation to unlock investment, drive growth, and create jobs within the cryptocurrency industry.
In September, the UK government proposed new legislation aimed at clarifying the classification of digital assets—including non-fungible tokens (NFTs), cryptocurrencies, and carbon credits—as “things” and “personal property” under the nation’s property laws.
The UK has intensified its regulatory measures following notable bankruptcies in the previous year.
The FCA is responsible for overseeing cryptocurrency activities, emphasizing anti-money laundering protocols and consumer safety.
Last year, the FCA instituted new regulations mandating that cryptocurrency firms register with the financial regulator and obtain approval for their marketing materials from an FCA-authorized entity.
Significant updates also included requirements for exchanges to clearly communicate the risks associated with cryptocurrency investments to their customers.
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