Reed Smith In-depth

Key takeaways

  • UK Treasury takes three steps toward digital asset rules
  • Gets closer to finalizing regulatory regime for cryptoassets
  • Develops protocols to address failures in the crypto industry
  • Promises to propose regulations of fiat-backed stablecoins by early 2024

The announcements His Majesty’s Treasury (HMT) outline the government’s final proposals for cryptoasset regulation in the UK, which would bring a number of cryptoasset activities into the regulatory perimeter for financial services for the first time. The government has also provided an update on its legislative approach for bringing fiat-backed stablecoins into the regulatory perimeter, enabling the FCA to regulate them. Draft legislation on the broader cryptoasset regime is expected to be laid in 2024, subject to Parliamentary time.

Response to the ‘Future financial services Regulatory Regime for Cryptoassets’ Consultation

In February 2023, the government published its consultation on the future financial services regulatory framework for cryptoassets (Consultation). In our previous alert, ‘UK regulation of cryptoassets – The proposed new framework and its global impact’, we considered the scope of the proposed regulation and potential implications for the cryptoassets industry. In its response to the Consultation (Response), HMT has presented the final proposals for cryptoassets regulation in the UK, having received 131 responses from a wide range of stakeholders. The government’s aim is for secondary legislation to be laid in 2024, subject to Parliamentary time.