The United Kingdom is setting the stage for one of the world’s most robust crypto regulatory regimes as it pushes to become a global leader in digital finance.

In a decisive shift away from the EU’s more lenient MiCA framework, UK regulators are crafting rules that treat crypto firms like traditional financial institutions. The proposed framework imposes capital requirements, strict disclosure obligations, and governance standards on platforms involved in trading, staking, and custody of cryptoassets.

The draft legislation introduces six newly regulated activities, bringing greater clarity to the scope of the Financial Conduct Authority’s (FCA) oversight.

Circle’s chief strategy officer, Dante Disparte, welcomed the move, saying it reflects a “major step in fostering responsible innovation.” He added that the UK’s commitment to regulatory clarity positions it as “a safe harbor for responsible innovation.”

Bitget COO Vugar Usi Zade also praised the effort. “Firms finally get clear definitions of qualifying crypto assets,” he said, noting that companies now have the transparency needed to plan product rollouts and scale operations in the UK.

The proposal also reclassifies UK-issued stablecoins as securities, not e-money, requiring them to meet capital market-style disclosure and redemption standards. Foreign stablecoins will still be permitted, but only through FCA-authorized platforms.

Rules around decentralized finance (DeFi) remain complex. Liquid and delegated staking services must register, though solo stakers and interface-only providers may be exempt. Still, experts warn that the heavy compliance burden could challenge smaller DeFi projects.

The FCA is expected to finalize the rules by 2026, striking a balance between innovation and regulation while reinforcing the UK’s ambitions in the global crypto landscape. (VANGUARD)