In 2022, the United Kingdom (UK) government declared its ambition to become a global crypto hub. Three years later, that vision remains only partially realized — and the country now faces stiff competition. While the European Union (EU) and the United States (US) have advanced with comprehensive regulatory frameworks, the UK is still in the consultation phase, raising concerns among industry leaders about its competitiveness.
The European Union’s Markets in Crypto-Assets (MiCA) regulation, which came into effect in 2024, provides a unified legal framework for crypto assets across all member states. This regulatory clarity has positioned the EU as an attractive destination for crypto firms seeking stability and market access. In contrast, the UK’s delayed approach has left many companies in a state of uncertainty, potentially hindering innovation and investment.
Regulation in motion
In April 2025, the UK government released draft legislation aimed at regulating crypto exchanges, brokers, and stablecoin issuers. The proposed rules, which build upon the Financial Services and Markets Act 2023, are intended to bring crypto activities under the purview of the Financial Conduct Authority (FCA). However, the finalization of these regulations is not expected until the end of 2025.
One notable aspect of the UK’s proposed regulations is the exemption of overseas stablecoin issuers from domestic authorization requirements. This move aligns the UK more closely with the US approach and contrasts with the EU’s stricter stance, which mandates that any company selling stablecoins to EU investors must secure authorization from European regulators. While this exemption may encourage foreign investment, it also raises questions about the UK’s commitment to comprehensive oversight.
The FCA’s track record in approving crypto firms has been a point of contention. Since 2020, only 14% of the 368 applications received have been approved, leading to frustration within the industry. The FCA plans to introduce a new authorization regime in 2026, which will require firms to undergo a more exhaustive approval process. This extended timeline may further delay the UK’s ability to establish itself as a leading crypto hub.
The way ahead
Despite these challenges, the UK government has signaled its intent to collaborate with international partners. Finance Minister Rachel Reeves announced plans to work with the US to support the responsible growth of digital assets, including discussions on a regulatory “sandbox” for digital securities. Such initiatives could help the UK align its regulatory framework with global standards and foster innovation.
While the UK has taken steps toward establishing a regulatory framework for crypto assets, its delayed and cautious approach risks ceding ground to more proactive jurisdictions. To realize its ambition of becoming a global crypto hub, the UK must expedite its regulatory processes, provide clarity to industry participants, and foster a positive environment for innovation and investment.
