UK Treasury Plans Crypto Regulation Under FCA by 2027

The UK Treasury plans to regulate cryptocurrencies under the Financial Conduct Authority’s framework by 2027, ensuring increased oversight and transparency, as announced by Chancellor Rachel Reeves.

This regulation aims to enhance consumer confidence, address crypto’s unclear origins, and ban political donations, significantly impacting the cryptocurrency landscape in the UK.

UK’s FCA to Oversee Crypto Assets by 2027

UK Treasury’s decision to bring cryptocurrencies under the FCA regulatory framework by 2027 represents significant policy change targeting enhanced transparency. Spearheaded by Chancellor Rachel Reeves, the effort also seeks to combat illegal activities by banning cryptocurrency use for political donations.

From 2027, crypto assets will follow FCA guidelines similar to other financial products. This includes mandatory compliance for entities dealing in qualifying cryptoassets. The shift aims to bolster consumer confidence across the market.

Reactions have been mixed, with some industry stakeholders applauding increased oversight, while others express concern over stifling innovation. “The new regulatory framework aims to create a safer financial environment while ensuring the UK remains at the forefront of financial innovation,” commented Chancellor Reeves. Crypto use banned for UK political donations has been a significant topic amidst these changes.

Historical Context and 2023 Bitcoin Market Trends

Did you know? The UK previously pioneered regulatory involvement by extending Money Laundering Regulations to crypto businesses in Q1 2020, signaling a long-term strategic approach to crypto oversight.

According to CoinMarketCap, Bitcoin (BTC) is priced at $88,186.11, with a market cap of $1.76 trillion. BTC’s recent price movements show a 2.45% 24-hour decline, adding to broader 23.45% reductions over 90 days. Its trading volume is at 49.74 billion, a significant drop by 22.76%.

Coincu research emphasizes regulatory developments will likely impact financial technology adoption across the UK. The focus on stablecoins, slated for FCA oversight by 2025, reflects shifting trends towards more robust frameworks in crypto asset management. Observing these trends, the crypto market plunge in December has also raised many questions about market volatility.