Progress Slow Despite High Hopes

Since 2022, both Conservative and Labour governments have pledged to transform the UK into a global crypto hub. Yet years later, many in the industry feel those aspirations remain unfulfilled. Critics say progress is slow and policy focus has gravitated toward other priorities. Tom Spiller of Rosenblatt Law observed that crypto “is not a key mission” under Labour’s current leadership.

Regulatory Frameworks Finally Taking Shape

Still, the tone appears to be shifting:

• HM Treasury launched consultations in April 2025 to amend the Financial Services and Markets Act (FSMA)—potentially recognizing crypto as a legitimate asset class and legalizing activities such as stablecoin issuance and staking.

• The FCA issued discussion papers in May 2025 outlining rules for stablecoins, crypto custody, financial resilience, and anti-failure measures. They propose bringing issuers and custodians into statutory regulation, with final rules expected in 2026.

• The FCA also released a consultation on broader crypto activities including trading platforms, lending, borrowing, staking, DeFi, and credit use for crypto purchases. This invites industry input on areas long outside core financial regulation.

Consumer Protection Measures

• New draft rules could prohibit retail customers from using credit cards or loans to purchase high‑volatility cryptoassets (except FCA‑regulated stablecoins). Staking transparency and credit assessments for borrowers are also under review.

• The FCA is preparing to lift its ban on crypto exchange-traded notes (ETNs) for retail investors, aligning with the broader agenda of integrating crypto into mainstream financial markets—while warning of the risks involved.

Institutional Infrastructure Advancing

Institutional crypto trading in the UK is gaining traction. London’s first regulated crypto-derivatives exchange, GFO‑X, launched in mid‑2025 with backing from major institutions. It offers bitcoin futures and options and signals a shift toward trust‑anchored institutional participation.

Where the UK Stands Globally

While the UK’s reforms remain incomplete, global competitors are moving faster:

• The EU’s MiCA framework has been fully in force since December 2024.

• In the U.S., legislative progress such as the GENIUS and CLARITY Acts aim to formalize rules on stablecoins and token classification.

Market insiders fear these gaps could drive investment and talent toward more decisive jurisdictions. As explained by James Harris of Tesseract: “the tone has mostly been one of caution and consumer protection, slowly giving way to pragmatism”—but momentum in the UK is still comparatively restrained.

Next Steps for the UK Crypto Industry

Industry advocacy groups are proposing more proactive measures:

• Appointing a blockchain special envoy for policy alignment and international engagement.

• Launching a Digital Asset Action Plan to support innovation through public services, incentives, and regulatory clarity.

• Establishing an ongoing industry–government engagement forum to foster agile policymaking.

Additionally, a draft law known as the Property (Digital Assets, etc.) Bill is under parliamentary debate, which could formally define cryptoassets as legal property.

The UK’s crypto ambitions may have stalled, but recent regulatory consultations and the launch of infrastructure like GFO‑X suggest a turn toward entrenching crypto within the formal financial system.

• Unchanged: No full regulatory regime yet; transformation remains incomplete.

• Evolving fast: Consultations on FSMA reforms, stablecoins, custody, and consumer protections are underway.

• Opportunities ahead: If enacted, proposed legislation and institutional innovation could position the UK to reclaim leadership in digital finance.