In a significant development for the United Kingdom’s financial landscape, Chancellor of the Exchequer Rachel Reeves announced on Tuesday that cryptocurrency firms will be subject to the same regulatory standards as traditional financial institutions. This initiative is aimed at fostering a safer environment for consumers while promoting growth in the fintech and digital asset sectors.

Speaking at the Innovate Finance Global Summit in London, Reeves expressed her commitment to “back the builders” of the cryptocurrency space, highlighting the need for strong consumer protections alongside the support for legitimate enterprises. The new regulatory framework is anticipated to become law later this year, representing a crucial step in aligning the UK’s approach with international standards while simultaneously stimulating economic growth.

“While the UK will always be committed to high international standards, I am determined that our regulatory framework supports economic growth,” Reeves stated. This announcement comes at a time when interest in cryptocurrencies continues to rise. According to the Financial Conduct Authority, approximately 12% of UK adults now own or have owned cryptoassets, a marked increase from the 4% recorded in 2021. However, this rise in adoption has also raised various concerns regarding investor protection and market stability.

Reeves’ address follows her recent discussions in Washington with US Treasury Secretary Scott Bessent, during which they explored possibilities for a trade agreement and transatlantic cooperation on crypto regulation. The UK Treasury noted that the two sides acknowledged the significance of coordinated regulatory efforts to nurture responsible growth within the sector. “For the UK to be a world leader in digital assets, international cooperation is vital,” Reeves asserted, mentioning that further dialogues are planned for June through a US/UK regulatory working group.

The legal community has responded positively to the Chancellor’s proposal. Nick Price, a crypto and financial services lawyer at Osborne Clarke, remarked that the strategy “explicitly aligns the UK with the US approach” to regulation, diverging from the European Union’s tailored regulatory framework. This shift could position the UK to compete more effectively in the burgeoning digital assets market while ensuring robust consumer safeguards are in place.

As the legislation progresses, industry stakeholders and consumers alike will be closely monitoring its implications for the future of cryptocurrency in the UK.

Source: Noah Wire Services