The UK aims to develop its digital asset sector by promoting the growth of the domestic Web3, along with greater consumer protection, through a modernisation of cryptocurrency regulations.
The US regulatory counterparts will work closely on this initiative through meetings involving Treasury Secretary Scott Bessent.
The UK Will Have A New Crypto Policy
The crypto community has expressed doubts about the plans published by the UK Treasury for possible regulatory changes. The Treasury shows an unwavering commitment to eradicating illegal activities related to digital assets, which generates scepticism towards its proposals. The UK continues to support a regulated approach to cryptocurrency, unlike the US, which appears to be easing restrictions instead.
HM Treasury
In a global context of evolving crypto regulations, the US is showing a proactive approach to interacting with the industry. The SEC has launched a Crypto Task Force for direct dialogues with business leaders, while developing a comprehensive regulatory framework for stablecoins, which is considered a top priority.
Focus On UK-US Regulatory Alignment
The UK adopts similar principles of international cooperation as the US in its current regulatory approach. Reeves held a meeting with US Treasury Secretary Scott Bessent to discuss various issues, including the creation of a cross-border regulatory sandbox, supported by several crypto industry leaders. The UK and US governments announced the imminent creation of a financial regulatory working group, with the shared goal of aligning policies.
The Chancellor of the Exchequer, Rachel Reeves, supported this initiative stating:
"Through our Plan for Change, we are making Britain the best place in the world to innovate - and the safest for consumers. Strong rules on crypto will boost investor confidence, support the growth of fintech and protect citizens across the UK."
HM Treasury
Fundamental Differences In Approach
Fundamental differences in the messages conveyed emerge. US regulators show a growing preference for targeted approaches rather than general crackdowns, while the UK Treasury continues to emphasise its commitment against malicious actors. The UK government wants to develop the sector through balanced regulation, while avoiding a completely laissez-faire approach.
The concerns of the crypto community stem from previous experiences. The UK crypto sector has received criticism for its strict regulations, which have led several companies to move their operations abroad. The UK's reputation for strict regulation could become an obstacle to the development goals of Web3.
It is still too early to make firm predictions on the evolution of crypto regulation in the UK. By July, the government will publish an operational plan to update regulation, creating a timeline to adapt policies, especially in collaboration with the US. The coming months will be crucial to understand how the UK's digital asset strategy will develop and what effects it will have.
