UK to Initiate Cryptocurrency Regulation Under FCA Beginning in 2027, Treasury Announces

The UK Treasury is working on regulations to incorporate cryptocurrency under the supervision of the Financial Conduct Authority (FCA), set to take effect in 2027. According to a statement from the finance ministry, digital assets will be governed similarly to other financial products.

Key Takeaways

The UK Treasury is set to regulate cryptocurrency under FCA oversight by October 2027.
The regulation aims to provide consumer protections and ensure transparency in the crypto market.
12% of UK adults own cryptocurrencies, with legal recognition of digital assets already established.
By the end of 2026, both the FCA and Bank of England plan to finalize their respective regulatory frameworks.
Concerns have arisen over rising investment scams and the potential ban on crypto political donations.

FCA regulation

On Monday, Reuters reported that the UK is poised to establish formal regulations for crypto by October 2027.

The Chancellor of the Exchequer, Rachel Reeves, emphasized that this initiative will create “clear rules of the road” and help keep “dodgy actors” out of the crypto market, thus providing “strong consumer protections.”

“Integrating crypto into the regulatory framework is an important step toward ensuring the UK remains a leading global financial center in the digital era,” the Chancellor remarked.

This move comes as the European Union implemented a similar regulatory framework (MiCA) a year ago, and the United States is also advancing its own cryptocurrency regulations.

Additionally, the UK aims to collaborate with the U.S. on crypto regulation and innovation through the "Transatlantic Taskforce." A draft bill will be introduced in Parliament later today.

Understanding the New FCA Crypto Regulations

The proposed rules will bring cryptocurrency firms, including exchanges and digital wallets, under the oversight of the Financial Conduct Authority (FCA).

This regulation ensures that crypto services are treated like other financial products, meeting transparency standards, as reported by The Guardian.

Lucy Rigby, the minister for the City of London, stated that these regulations “will provide firms with the clarity and consistency they require for long-term planning.”

Notably, recent statistics from the financial regulator show that approximately 12% of UK adults currently own some form of cryptocurrency, a figure that has seen consistent growth in recent years.

As part of this regulatory shift, the UK has officially recognized Bitcoin and other crypto assets as legal properties under new legislation, allowing for ownership, inheritance, and recovery of digital assets.

Regulatory Developments by End of 2026

In a separate development, the UK FCA is working on regulations concerning trading and market abuse, custody, and issuance of digital assets. Furthermore, the Bank of England has recently put forth proposals for the regulation of stablecoins.

Both the Bank of England and the FCA aim to finalize their respective regulations by the end of 2026, according to the Reuters report.

These moves towards regulatory clarity come at a critical time, as the cryptocurrency market faces instability and has witnessed an increase in digital asset fraud cases.

Official UK banking industry data indicates that losses from investment scams involving cryptocurrency jumped by 55% over the past year.

In addition, there are ongoing discussions about potential plans to prohibit political donations in cryptocurrency due to concerns regarding their unverifiable origins and ownership.