UK Chancellor Applies Financial Market Rules to Cryptocurrencies

As the crypto market reaches more mainstream audiences, various government authorities are making moves to regulate the market. The UK is not left out in this trend. Rachel Reeves, the Chancellor of the Exchequer, hinted at an upcoming crypto regulation during a keynote speech at the just-concluded Innovate Finance Global Summit in London.

She mentioned that the regulations governing the financial markets in the country will soon apply to the crypto sector.

Upcoming Crypto Regulations to “Back the Builders”

The Chancellor of the Exchequer explained that the goal is to “back the builders” within the crypto market and the broader financial markets while fostering transparency and consumer protection. This will help the UK government to boost economic growth while upholding international regulatory standards.

Notably, Reeves’ quest for crypto regulation comes amid growing interest in cryptocurrencies in the UK. According to a recent report, 12% of UK adults, about 7 million individuals, have invested in cryptocurrencies. Among them are young men ready to borrow money to invest in crypto assets.

With such crypto-hungry investors in mind, the UK’s Financial Conduct Authority (FCA) recently revealed plans to ban retail investors from borrowing money to purchase cryptocurrencies. The government agency believes this move will help to curtail financial losses due to crypto price volatility.

A Path Aligned “With the US Approach”

Since emerging as the Chancellor in July 2024, Reeves has made various moves to grow the UK economy. Last month, she visited the United States Treasury Secretary, Scott Bessent, to discuss different topics, including a potential alignment of crypto rules. Commenting on this move, Reeves added in her keynote speech:

“For the UK to be a world leader in digital assets, international cooperation is vital.”

Osborne Clarke’s crypto lawyer, Nick Price, supported Reeves’ decision to tap into the United States’ financial regulatory path. He mentioned that this “aligns the UK with the US approach.”

Still, not everyone welcomes the idea of blending the US approach to crypto with that of the UK. Emma Reynolds, the UK’s Treasury Secretary, mentioned at a two-day summit that the UK government will not adopt a national crypto reserve like the US did.