UK Unveils Draft Law to Regulate Bitcoin and Crypto

• UK publishes a draft law for crypto regulation.
• Focuses on Bitcoin and digital asset market structure.
• Law aligns UK with global crypto compliance trends.

The United Kingdom has taken a decisive step toward regulating cryptocurrencies by releasing a draft version of a law aimed at overseeing the digital asset space, including Bitcoin and other cryptocurrencies. The proposed legislation signals the country’s intention to become a safe and competitive hub for crypto innovation while ensuring strong investor protections and financial stability.

This draft, published by the UK Treasury, outlines how various crypto activities — such as trading, lending, and custody services — would be brought under the purview of the Financial Conduct Authority (FCA). The goal is to set clear standards for firms operating in the digital asset sector.

Bitcoin and Other Cryptoassets Under the Law

The draft specifically mentions Bitcoin, indicating the government’s focus on mainstream cryptocurrencies. The legislation aims to bring crypto-related businesses in line with traditional finance rules, including compliance with anti-money laundering (AML) standards and consumer protection measures.

Moreover, the draft framework proposes that crypto exchanges and custodians must meet the same standards as banks and traditional financial institutions. This move may help reduce risks of fraud, hacking, and market abuse — common concerns in the crypto sector.

Aligning with Global Compliance Standards

The UK’s approach aligns with the global trend toward tighter crypto regulations. The European Union has already introduced MiCA (Markets in Crypto-Assets Regulation ), and the UK’s draft seems to reflect similar intentions. With the Financial Services and Markets Act already recognizing crypto assets as regulated financial instruments, this draft fills in the structural gaps and sets the groundwork for detailed implementation.

The consultation on this draft law will remain open for feedback from industry experts and the public, showing the UK’s commitment to collaborative and transparent regulation. If passed, the law could position the UK as a global leader in compliant crypto innovation.

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