Despite promises from previous prime ministers to make the UK a crypto hub, the UK is still careful about regulating the crypto industry.
In 2022, the Prime Minister Rishi Sunak promised to change the laws governing the Crypto industry in the UK, making it more lovely to blockchain businesses. Rhetoric may have rested on entrepreneurs, but executives and observers from the industry say development is slow and there are still no policies it wants to expand.
The Labor government under the PM Keir Starmer has not done much to expand this agenda; Crypto gets a back seat with other concerns. Tom Spiller, a law partner dedicated to Rosenblatt Law, told Cointelegraph that labor “appears to be more careful and without a clear focus seating within the major government missions.”
The past promises to make the UK a naked in a crypto hub, but the signs suggest that the water increases.
Things can search for the UK crypto industry
In the US, crypto is an actively pursuing the partisan issue, but the UK’s main political party has hardly occurred.
In April 2022, the conservative government led by Sunak announced A plan to make the UK a crypto hub. The suggested steps include recognition of Stablecoins as a payment form, which introduces a “financial sandbox infrastructure” and established a “cryptoasset coherence” group to work in the industry.
The reform announces that it will receive bitcoin (Btc) Contributions to the campaign earlier this year, and the labor, while reminding of user protection, has not been hated in the industry.
James Harris, CEO of the Fintech firm Tesseract, told Cointelegraph that “the tone is almost one of the consumer’s care and protection, slowly giving way to pragmatism. The new government has not yet reversed, suggesting some alignment with Bipartisan.”
“Overall, crypto in the UK still feels opportunist than ideological.”
Harris added that there are encouraging signs. He said April 2025 HM Treasury Consultations and Financial Conduct Authority Paper CP25/14 “suggests a move towards treating crypto as a legitimate class owner under the Financial Services and Markets Act (FSMA).”
Related: UK Finance Regulator FCA A ‘Deserrent’ in the crypto industry, Cryptouk says
The consultation of treasury, that closed In May, the proposed changes to the FSMA will provide stablecoin, staking and other crypto activities. The suggested CP25/14 of the Financial Conduct Authority but did not create a set of policies for the preservation of stablecoins and crypto.
The owner (Digital Assets, etc.) Bill, which has seen a recent Parliament debate, can soon identify digital ownership as ownership. If passed, the law represents “a major success.”
The UK crypto industry wants regulators to be more decisive
Despite these positive development for the industry, some are concerned about the speed of the government’s opinion in cryptocurrencies.
Spiller said, “There is a concern about the speed of development, especially compared to developments in constituents such as the United States. The slower risks of momentum encourage talent and capital to move elsewhere.”
The UK is still “getting good behind its global peers,” Harris said. He emphasized that the EU has markets in crypto-assets (MICA) regulation, the UAE is widely accepting crypto, and the US “produces significant legislative development that provides more clarity than before.”
Industry groups are ramping up their campaigns to try to change the legal views in the UK. Cryptouk, a trade organization for the crypto industry, “is in contact with MPs, peers, regulators, media and other stakeholders” to change the laws, according to a speaker.
In particular, the group has called regulators to identify stablecoins, promote what it sees as fair banking policies “so more digital companies owned can use the same financial services that other UK businesses can use,” and change advertising policies.
Per spiller, there is also a room for the UK to improve how it manages the crypto assets it holds from criminal seizures. “These possessions are not always managed very well. There is an opportunity for better administration of these handles to benefit the public purse.”
The home office and the country’s treasury leader, Rachel Reeves, is currently working to sell some of the owners worth $ 7 billion to increase the government’s budget. Harris believes it still implies an imperfect understanding and “short-term crypto.”
Related: UK Working to sell $ 7B on the seized Bitcoin to boost the budget: Report
The crypto sector is largely aligned with government anti-money laundering requirements and has established the travel rule. “There are solid tools available to support compliance, and responsible space actors use them,” Spiller said.
However, a major drawback is that many crypto projects are not easily categorized under the current law that manages traditional financial instruments. Industry observers say there is a need for more regulations and appropriate for the purpose.
Regulations have changed the scene of the industry
In April, when the government announced Its draft law for the crypto industry, it showed consumer protection and said the new law was “(broken) the evil actors while supporting legitimate change.”
The appearance of specific and stable regulatory frameworks, such as Mica in Europe, is expected to bring a integration -s In the local crypto industry. Illegal or illicit actors, as well as small companies that cannot set a bill for compliance, are expected to appear in the market. In this regard, large and following companies will take their space and compete with each other for market sharing.
This trend is also expected in the US, where Congress aims to pass the clarification law, which will provide a regulation regulation for the crypto industry. President Donald Trump has already signed the Genius Act in charge of Stablecoins in law last week.
According to a paper May 2025 from three partners in the International Law Firm White & Case, “players such as Coinbase, Kraken and Circle are expected to conduct add-ons taking in the near term.
This means that the same reshaping of the blockchain business scene may prove to be true for the UK crypto industry, that is, if the government can move on to the industry’s changes.
At this point, pro-crypto observers said the UK is still moving slowly. Harris said, “There is still much to do if the UK wants to get the ‘crypto hub’ ambitions.”
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