Despite promises from past prime ministers to turn the UK into a crypto hub, the UK is still cautious about regulating the crypto industry.
In 2022, then Prime Minister Rishi Sunak promised to amend laws governing the crypto industry in the UK, making them friendlier to blockchain businesses. The rhetoric may have relieved entrepreneurs, but executives and observers from the industry say that progress is slow and that it still doesn’t have the rules it wants in order to expand.
The Labour government under PM Keir Starmer has done little to further this agenda; crypto has taken a back seat to other concerns. Tom Spiller, a partner at crypto-focused Rosenblatt Law, told Cointelegraph that Labour “appears more cautious and there is not a clear focus that sits within the government’s key missions.”
Past promises to turn the UK into a crypto hub have not come to fruition, but signs suggest the tide is changing.
Things could be looking up for the UK crypto industry
In the US, crypto is an actively pursued partisan issue, but the main political parties in the UK are almost equally unengaged.
In April 2022, the Conservative government led by Sunak announced a plan to make the UK a crypto hub. Proposed measures included recognizing stablecoins as a form of payment, introducing a “financial market infrastructure sandbox” and establishing a “Cryptoasset Engagement Group” to work with the industry.
Reform announced that it would accept Bitcoin (BTC) campaign contributions earlier this year, and Labour, while stressing concern over user protection, has not been outwardly hostile toward the industry either.
James Harris, group CEO of fintech firm Tesseract, told Cointelegraph that “the tone has mostly been one of caution and consumer protection, slowly giving way to pragmatism. That hasn’t been reversed by the new government, which suggests some bipartisan alignment.”
“Overall, crypto in the UK still feels opportunistic rather than ideological.”
Harris added that there are encouraging signs. He said the April 2025 HM Treasury consultations and Financial Conduct Authority paper CP25/14 “suggest a shift toward treating crypto as a legitimate asset class under the Financial Services and Markets Act (FSMA).”
Related: UK finance regulator FCA a ‘deterrent’ to crypto industry, says CryptoUK
The treasury consultation, which closed in May, proposed changes to the FSMA that would allow for stablecoin issuance, staking and other crypto activities. The Financial Conduct Authority’s CP25/14 proposed but did not enact a set of rules for stablecoins and crypto custody.
The Property (Digital Assets, etc.) Bill, which saw recent debate in Parliament, could soon recognize digital assets as property. If passed, the law would represent “a major breakthrough.”
UK crypto industry wants regulators to be more decisive
Despite these positive developments for the industry, some are concerned about the speed of the government’s supposed change of opinion on cryptocurrencies.
Spiller said, “There is concern about the pace of progress, especially when compared to developments in jurisdictions like the United States. This slower momentum risks encouraging talent and capital to migrate elsewhere.”
The UK still “lags well behind its global peers,” said Harris. He stressed that the EU has its Markets in Crypto-Assets (MiCA) regulatory framework, the UAE is broadly accepting of crypto, and the US is “making meaningful legislative progress that provides more clarity than ever before.”
Industry groups have been ramping up their campaigns to try to change the legal landscape in the UK. CryptoUK, a trade organization for the crypto industry, has been “liaising with MPs, peers, regulators, media and other stakeholders” to change laws, according to a spokesperson.
Specifically, the group has called on regulators to recognize stablecoins, institute what it sees as fairer banking policies “so more digital asset companies can use the same financial services other businesses in the UK can use,” and change advertising rules.
Per Spiller, there is also room for the UK to improve how it manages the crypto assets that it holds from criminal seizures. “These assets are not always managed optimally. There is an opportunity for better stewardship of these holdings to benefit the public purse.”
The Home Office and the head of the country’s Treasury, Rachel Reeves, are currently working to sell some of these assets worth $7 billion to supplement the government budget. Harris believes this still indicates an imperfect understanding and “short-termist view of crypto.”
Related: UK working to sell $7B in seized Bitcoin to boost budget: Report
The crypto sector has largely been able to align with the government’s Anti-Money Laundering requirements…
cointelegraph.com