A summer of crypto in the UK — and what’s next

Crypto-asset ownership in the UK is growing, comprising as much as 12% of the population according to the Financial Conduct Authority (FCA). The UK government, judging from recent financial-services announcements, certainly hopes crypto can supports its Plan for Growth. And yet industry remains concerned the UK is falling behind the US, Brazil, South Korea and others in taking advantage of these new technologies. This blog considers influences and likely scenarios for the crypto sector.

Recent announcements:

• Crypto-asset legislation: In April this year, HM Treasury published a draft amendment to the Financial Services and Markets Act (FSMA), extending the scope of the Regulated Activities Order to “qualifying crypto-assets and related activities”. The government intends to formally introduce this legislation by the end of 2025.
• FCA crypto-asset regime: The FCA continues to design the UK’s crypto-asset regime. Recent consultations include proposals for regulating crypto-asset trading platforms, stablecoins and staking. Further consultations are expected in the coming months, with implementation in mid-2026.
• OFSI Threat Assessment: The Office of Financial Sanctions Implementation (OFSI) released a crypto-asset sector threat assessment, highlighting vulnerabilities in areas such as sanctions evasion and fraud and calling for strengthened compliance across the industry.
• Retail Access to ETNs: In a significant policy shift, retail investors in the UK will soon be able to access regulated exchange-traded notes (ETNs) tracking crypto-assets such as Bitcoin and Ethereum, via FCA-approved exchanges.
• The Property (Digital Assets) Bill: This bill clarifies that digital assets are considered personal property under UK law and outlines new custody frameworks for stablecoins, including the use of statutory trust arrangements.
• Integration with Traditional Finance: Broader initiatives include the UK’s national payments vision, proposals for a Digital Pound and enhanced access for blockchain developers to the FCA’s Digital Securities Sandbox. These efforts aim to bring digital assets into the mainstream financial system and boost economic growth.

These announcements all point to a rapidly evolving market for crypto-assets. Below we consider the factors likely to influence next steps.

Faster Regulatory Processes. Following criticism that the UK is falling behind, and with the FCA facing criticism for its current processing times, we could expect HM Treasury to lay the crypto-asset legislate in the next few months and place pressure on the FCA to shorten its timelines. The crypto-asset legislation is expected by the end of 2025; the FCA’s crypto-asset regime should be implemented by mid-2026. With a finalised regulatory regime, more firms will need to register. The Mansion House reforms entail reductions to statutory deadlines; we expect pressure on the FCA to support and approve authorisations in innovative areas. On the other hand, however, crypto firms have traditionally struggled to receive authorisation, and registration delays could hamper the start of a crypto-asset regime.

The UK wants to remain a fintech leader. The UK is looking to create a crypto-asset regime that aligns with the US but creates a streamlined, more predictable regime consolidated within the FCA. Combining the US approach with EU crypto-asset activities such as retail access to crypto-ETNs shows the UK is trying to build a bespoke, efficient regime. And yet the UK is increasingly behind, particularly regarding stablecoins. The EU has a stablecoin framework through its June 2023 MiCA regulations; the US is advancing its own new regime following the July 2025 GENIUS Act. In the UK, the Bank of England has confirmed an autumn 2025 consultation. The UK, by following others, may find it hard to compete for status as a fintech leader.

Additional regulations. With more people accessing crypto-assets, we could see further restrictions in areas of concern. In particular, the government and FCA could clarify how consumer protections are upheld. For example, the FCA intends to prevent consumers’ buying crypto-assets using credit. We could also see further clarifications on how updated money-laundering regulations will apply across the crypto-asset landscape following the recent risk assessment. Such changes could challenge the UK’s aims to create a streamlined regulatory environment.

Political pressure. The government is looking to make progress across its core missions and Plan for Growth, pointing at expanding the use of innovative technologies like crypto-assets to boost financial markets and growth. However, this is likely to take time to be integrated and for any benefits to appear. Opposition parties are also raising the profile of crypto-assets, with Reform now accepting Bitcoin donations and confirming that a draft crypto bill would be a priority.

Geopolitics. Bitcoin surged following the US-UK trade deal announcement; with the US racing ahead to boost use of crypto-assets, the sector will likely play a role in further bilateral (or broader) cooperation. The UK also wants to incentivise investment and finance in the UK, including via implementation of Overseas Recognition Regimes (ORRs) which support cross-border services and international crypto firms.

Further details on financial services strategies. Key reforms, including the National Payments Vision and the Financial Inclusion Strategy, are expected to be shared in more detail later this year. How existing financial structures integrate crypto-assets is an interesting challenge, as large institutions look to develop their own methods and we may see reluctance from some industry figures. For example, the retail-payments ecosystem is being reformed to include new technologies like blockchain, and there are concerns blockchain may lead to issues regarding scale and volume of transactions, privacy, consumer redress and operating costs.

Wider economic environment: with the autumn budget coming soon, we could see new financial services reforms and regulations impacting the sector. There are also additional priority areas where government policy could affect the crypto-sector: for example, on AI, emerging technologies and cyber security. Any of these could impact the way the business or consumers behave, leading to uncertainty. The Information Commissioner’s Office (ICO) and FCA are undertaking a joint project on AI in financial services, which could lead to additional guidance applying to any crypto firm that uses AI.

What does this mean for crypto firms? In a busy and rapidly evolving environment, there is an opportunity to engage and share evidence-based policies to ensure you are in the best position. If you have any questions or would like to discuss, please contact us as we would love to chat!