UK Chooses To Side With US Instead Of EU On Crypto Regulation: Unveils New Guidelines

Fearing a loss of competitiveness against global fintech centers, the UK has unveiled new draft regulations for the cryptocurrency industry. 

On 29 April 2025, Finance Minister Rachel Reeves stated, “Through our Plan for Change, we are establishing Britain as the premier destination for innovation – and the most secure environment for consumers. Strong regulations concerning crypto will enhance trader confidence, promote the growth of Fintech, and safeguard individuals throughout the UK.” 

The UK government is now mandating compliance for crypto exchanges, dealers, and representatives.

Approximately 12% of UK adults now possess or have possessed cryptocurrency, compared to merely 4% in 2021.

Nonetheless, there are still many risks of scams.

Therefore, we are tightening regulations, implementing strong rules for cryptoassets to enhance trader confidence, foster growth, and protect people throughout the UK. pic.twitter.com/RElZPs5zzb

— HM Treasury (@hmtreasury) April 29, 2025

Significantly, the UK has chosen to align with the US, categorizing crypto assets as securities. This represents a shift from the EU’s Markets in Crypto-Assets (MiCA) framework, which became effective in December 2024.

“The Chancellor also indicated that the UK and US will utilize the forthcoming UK – US Financial Regulatory Working Group to sustain discussions that encourage the use and responsible expansion of digital assets,” the UK government website stated. 

The government intends to finalize the legislation by the conclusion of 2025.

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UK’s Transparent New Regulations To Enhance Investor Confidence

Additionally, the Chancellor revealed that talks with the US regarding supporting the use and responsible expansion of digital assets are ongoing, as the government seeks to stimulate growth through its Plan for Change.

The Chancellor also announced that on 15 July, alongside her Mansion House speech, the government will release the inaugural Financial Services Growth and Competitiveness Strategy. This initiative will promote long-term growth in the financial services sector, identifying Fintech as a priority area, and assist it in financing investment and development across the UK.

Approximately 12% of UK adults currently own or have owned digital currency, rising from only 4% in 2021.

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Industry Leaders Urge UK To Address Immediate Issues Regarding Crypto law, Funding, Innovation

Despite government initiatives, numerous fintech and crypto leaders have voiced concerns that the UK is losing its competitive edge. 

“I believe the UK will ultimately succeed — but there’s a risk of driving innovation to other markets if we miss the mark,” Keith Grose, Coinbase’s UK head, told CNBC on 30 April 2025.

Correspondingly, Jaidev Janardana, CEO of digital bank Zopa, commented, “Considering the speed of innovation, I believe the US is currently leading — despite its own set of challenges. However, in comparison to locations like Singapore and Hong Kong, the innovation rate is significantly higher,” he mentioned.

Tim Levene, CEO of venture capital firm Augmentum Fintech, expressed, “We’re scrambling for funding sources in the UK, where it appears more beneficial to seek capital in the Gulf, the US, Australia, or other regions in Asia, which doesn’t feel appropriate.”

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