The UK finally draws a line of sand when it comes to regulating encryption. On April 29, 2025, Minister of Finance Rachel Reeves presented a draft of a set of rules aimed at bringing coding, merchants and agents subject to official supervision for the first time. Think of the matter as a long -awaited Britain’s attempt to prevent bad actors from running while continuing to grant the industry room to grow. UK’s encryption rules for 2025 aim to bring more structure and supervise the growing digital assets.
Crypto has flourished in the UK. About 12 percent of adults were involved in digital assets, up from only 4 percent in 2021. But this increase did not come without chaos. Leaves left, fraud, and the chaos of the organized market playing the knees. This legislation is an attempt to stop connecting the leaks to the adhesive tape and start laying real foundations.
The main provisions for draft legislation
So what is actually in the proposal?
For beginners, the UK’s encryption companies must follow the rules that reflect those applied to traditional financial institutions. This includes clearer consumer protection, better transparency, and higher standards for how to operate daily companies.
The UK falls encryption laws – a major transformation
The new rules provide existing financial regulations to cover encryption exchange, stablecoins, and guard services. FCA approval will now be required for many operations
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The Financial Behavior Authority, or FCA, will get new salads to intervene when things go on my side. The law also covers the lending of encryption, a gray area that has burned both investors and platforms in the past.
It is not only for safety, though. The government is also considering in a big way, aiming to put the UK as a world player in Fintech while making sure that users do not let the bag get off when things get worse.
International cooperation with the United States
Here where things become interesting. The UK does not do this alone.
Reeves was talking to US Treasury Secretary Scott Payet about synchronizing coding rules. They are looking forward to the deeper cooperation later this year, including perhaps creating a “sand box”, which is basically a friendly space where Fintech meals can test ideas without having to jump across a thousand organizational veils immediately.
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This step shows that both countries take the encryption seriously and realize that they can no longer organize in a vacuum anymore. Money across the border needs to think across the border.
Exemption for stablecoin exporters abroad
One to raise eyebrows in the draft is to dig foreign exporters. Under the proposed rules, only Stablecoin providers in the United Kingdom will need full approval. If you work from outside, you are outside the hook, at the present time.
This is a clear break from the European Union’s approach, which requires all Stablecoin exporters to fulfill strict standards regardless of their place of residence. The UK tries to keep itself attractive to international technology players through very heavy insecurity.
UK’s encryption rules for the year 2025: Industry and future expectations
Reactions were mixed from the encryption world, but mostly positive. Some say the time has come for the time when the UK gave a real structure to make a fast -moving industry. Others warn that the organization may make the risky assets appear safer than it is. Both points are valid.
The proposals are now open to public comments, as the government aims to close by the end of the year. Whether these rules are the beginning of something stable or just another correction function that still should be seen.
We look forward
The United Kingdom’s move towards real encryption organization is great. Through clear rules and focus on international cooperation, it tries to achieve a difficult balance: protecting users, supporting innovation, and staying able to compete. Long arrangement, but the ball is officially rolling.
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Main meals
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The UK has proposed the first comprehensive framework for encryption regulation, with the aim of bringing exchanges, merchants and agents under official oversight.
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The draft law will give the financial behavior authority (FCA) expanded powers, the introduction of consumer protection, and the regulation of encryption lending.
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Finance Minister Rachel Reeves is coordinating with US Treasury Secretary Scott Beesen to align the encryption regulations and possibly launch a joint sand fund for innovation.
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The controversial exemption allows the foreign Stablecoin exporters in the United Kingdom without full regulatory approval, unlike the rules of the European Union.
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The proposals have received mixed reactions, while supporting the industry for guidelines or the most obvious concerns about the investor’s misleading confidence.
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