UK Decides To Align With US Rather Than EU Over Crypto Regulation: Introduces New Rules

Amidst fear of losing ground to global fintech hubs, the UK has announced new draft regulations for the crypto sector.

On 29 April 2025, Finance Minister 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 UK government is now introducing compulsory regulation for crypto exchanges, dealers, and agents.

Around 12% of UK adults now own or have owned crypto, up from just 4% in 2021.

Yet too often, people are vulnerable to scams.

So we’re clamping down, with new robust rules for cryptoassets to boost investor confidence, drive growth, and protect people across the UK. pic.twitter.com/RElZPs5zzb

— HM Treasury (@hmtreasury) April 29, 2025

Importantly, the UK has decided to align with the US, treating crypto assets as securities. This marks a departure from the EU’s Markets in Crypto-Assets (MiCA) framework, which took effect in December 2024.

“The Chancellor also revealed that the UK and US will use the upcoming UK – US Financial Regulatory Working Group to continue engagement to support the use and responsible growth of digital assets,” the UK government website said.

The government aims to finalize the legislation by the end of 2025.

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UK’s Clear New Rules To Boost Investor Confidence

Furthermore, the Chancellor also revealed that discussions with the US about supporting the use and responsible growth of digital assets are underway, as the government works in national interest to drive growth through Plan for Change.

The Chancellor also announced that the government will publish the first-ever Financial Services Growth and Competitiveness Strategy on 15 July, alongside her Mansion House speech. This will support the financial services sector’s long term growth, with Fintech identified as a priority sector, and help it finance investment and growth across the UK.

Around 12% of UK adults now own or have owned crypto, up from just 4% in 2021.

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Industry Leaders Urge UK To Address Urgent Concerns Around Regulation, Funding, Innovation

Despite the government’s efforts, several fintech and crypto executives have expressed concern that the UK is losing its competitive edge.

“I think the UK will get it right — but there is a risk if you get it wrong that you drive innovation to other markets,” Keith Grose, Coinbase’s UK head, revealed CNBC on 30 April 2025.

Meanwhile, Jaidev Janardana, CEO of digital bank Zopa, weighed in too. “If I consider the pace of innovation, I believe the US is currently ahead – despite its own set of challenges. Yet, when you look at places like Singapore and Hong Kong, there is significantly faster innovation,” he said.

Tim Levene, CEO of venture capital firm Augmentum Fintech, said, “We’re scrambling around looking for pots of capital in the UK, where currently it would be more fruitful to go to the Gulf, to go to the US, to go to Australia, or elsewhere in Asia, and that that doesn’t feel right.”

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Key Takeaways

The new rules will require crypto firms serving UK clients to adhere to established standards on transparency, consumer protection, and operational resilience-mirroring requirements already in place for traditional financial service.

The government aims to finalize the legislation by the end of 2025, building on proposals first floated in 2023.

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