UK to push for regulation of virtual assets at the same level as financial products by 2027

The UK government is reported to be planning to prepare legislation to incorporate virtual assets into the same regulatory framework as existing financial products by 2027.

On the 15th, according to The Block, a virtual asset (cryptocurrency) specialist media, the UK Treasury said it intends to put in place legislation by 2027 to include virtual assets in the same regulatory framework as traditional financial products. The system is expected to be structured with the UK's Financial Conduct Authority (FCA) as the supervisory body.

The UK government plans that this measure will strengthen transparency in the virtual asset market, improve identification of suspicious transactions and enforcement of sanctions, and increase operator accountability. The intent is to raise transparency in the digital asset market and clarify the scope of supervision. The Treasury believes that if clear regulatory standards are established, legal uncertainty for market participants will be reduced and innovation within the regulatory framework could be promoted.

This plan is an extension of the 'Property (Digital Assets etc.) Act 2025', which the UK Parliament passed earlier this month. The law defined digital assets as a form of property recognized by law.

Rachel Reeves, UK Chancellor of the Exchequer, said, "By setting out clear rules for businesses, we can encourage investment, innovation and the creation of highly skilled jobs while strengthening consumer protection and excluding unsuitable operators from the market."

Currently in the UK, virtual asset operators must register with the FCA and comply with anti-money laundering (AML) and counter-terrorist financing (CFT) regulations. This includes customer due diligence (KYC) and suspicious transaction reporting obligations.

Meanwhile, the FCA is also speeding up stablecoin regulation. Nikhil Rathi, chief executive officer (CEO) of the FCA, said in a recent letter to Prime Minister Keir Starmer, "Based on the regulatory sandbox launched this year, we will support UK companies next year to conduct payment experiments with pound-linked stablecoins."