UK Plans TradFi‑Style Crypto Rules, Eyes Ban on Political Crypto Donations

CN
2 hours ago

The U.K. Treasury is finalizing a comprehensive regulatory framework that will subject digital assets to oversight mirroring that of traditional financial (TradFi) products, according to Chancellor of the Exchequer Rachel Reeves. These ambitious new rules, set to come into force in 2027, are designed to provide clarity for the crypto industry while enhancing consumer protection.

The Chancellor’s announcement closely follows the Financial Conduct Authority (FCA) revealing its strategic plans to accelerate regulation across the crypto sector in 2026. As part of its growth mandate, the FCA confirmed it will actively “progress” sterling-denominated stablecoins, aiming to position the U.K. at the forefront of this payment technology.

Read more: UK Regulator to Finalize Crypto Rules, Advance Stablecoin Framework in 2026

Under the regime established by the UK Treasury, the FCA will be formally tasked with supervising crypto firms. The core legislative priority is to bring all relevant companies, including major crypto exchanges and digital wallet providers, under the full scope of the U.K.’s existing anti-money-laundering regulations.

For the Reeves government, this legislative step is critical to helping the U.K. retain its status as “the world-leading financial center” in the evolving digital age. Chancellor Reeves underscored the dual purpose of the initiative:

“By giving firms clear rules of the road, we are providing the certainty they need to invest, innovate and create high-skilled jobs here in the UK, while giving millions strong consumer protections, and locking dodgy actors out of the UK market.”

Echoing this sentiment, Lucy Rigby, the City of London minister, stated that the new rules will give companies the “clarity and consistency” required for long-term planning, a feat which will ensure the U.K. remains a top destination for crypto asset firms looking to grow.

In a parallel move, reports indicate that U.K. ministers are also drawing up plans to ban political donations made via cryptocurrency. The government’s justification for the ban—which is likely to impact parties like Nigel Farage’s Reform UK—stems from the difficulty in adequately tracing the origin and ownership of such digital contributions, citing integrity concerns for the electoral system.

  • What is the U.K. planning for crypto regulation? The U.K. Treasury will introduce a full regulatory framework by 2027 that treats digital assets like traditional financial products.
  • How will the FCA’s role change under the new rules? The FCA will gain formal authority to supervise crypto firms and enforce existing anti‑money‑laundering standards.
  • Why is the U.K. advancing stablecoin oversight? Regulators aim to progress sterling‑denominated stablecoins in 2026 to strengthen the U.K.’s position in global payments innovation.
  • Are political crypto donations affected by these plans? Ministers are considering a ban on crypto‑based political donations due to concerns over traceability and electoral integrity.

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