UK Ditches EU Crypto Rules to Mirror US Approach—Brace for Regulatory Whiplash

London makes its move: The UK Treasury just sidelined EU crypto frameworks to align with Washington’s playbook. New rules drop this week—expect tighter stablecoin oversight and exchange reporting demands.

Why it matters: This isn’t just regulatory arbitrage—it’s a geopolitical power play. By choosing the SEC’s combative stance over MiCA’s harmonization, the UK bets Wall Street’s approach will attract more capital than Brussels’ caution.

The kicker? City analysts whisper this ’strategic alignment’ conveniently ignores how both US and UK regulators still can’t agree if crypto is a security, commodity, or Schrödinger’s asset class. Some ’special relationship.’

UK’s Clear New Rules To Boost Investor Confidence

Furthermore, the Chancellor also revealed that discussions with the US about supporting the use and responsible growth of digital assets are underway, as the government works in national interest to drive growth through Plan for Change.

The Chancellor also announced that the government will publish the first-ever Financial Services Growth and Competitiveness Strategy on 15 July, alongside her Mansion House speech. This will support the financial services sector’s long term growth, with Fintech identified as a priority sector, and help it finance investment and growth across the UK.

Around 12% of UK adults now own or have owned crypto, up from just 4% in 2021.

Industry Leaders Urge UK To Address Urgent Concerns Around Regulation, Funding, Innovation

Despite the government’s efforts, several fintech and crypto executives have expressed concern that the UK is losing its competitive edge. 

“I think the UK will get it right — but there is a risk if you get it wrong that you drive innovation to other markets,” Keith Grose, Coinbase’s UK head, revealed CNBC on 30 April 2025.

Meanwhile, Jaidev Janardana, CEO of digital bank Zopa, weighed in too. “If I consider the pace of innovation, I believe the US is currently ahead – despite its own set of challenges. Yet, when you look at places like Singapore and Hong Kong, there is significantly faster innovation,” he said.

Tim Levene, CEO of venture capital firm Augmentum Fintech, said, “We’re scrambling around looking for pots of capital in the UK, where currently it would be more fruitful to go to the Gulf, to go to the US, to go to Australia, or elsewhere in Asia, and that that doesn’t feel right.”

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Key Takeaways

• The new rules will require crypto firms serving UK clients to adhere to established standards on transparency, consumer protection, and operational resilience-mirroring requirements already in place for traditional financial service. 

• The government aims to finalize the legislation by the end of 2025, building on proposals first floated in 2023.