The UK Treasury has taken a decisive step in shaping the country’s regulatory stance on digital assets, announcing that overseas stablecoin issuers will be exempt from new domestic crypto rules.
UK exempts foreign stablecoin issuers
This marks a significant departure from the more rigid EU approach and signals alignment with the US on the future of crypto oversight.
Unveiled by Chancellor Rachel Reeves, the proposals form part of the UK’s first comprehensive regulatory framework for crypto assets, including market conduct rules for exchanges and brokers, enhanced enforcement powers for the Financial Conduct Authority (FCA), and safeguards against abuse and instability.
Central to the government’s messaging is its ambition to position Britain as both a fintech leader and a secure environment for innovation.
“Today’s announcement sends a clear signal: Britain is open for business, but closed to fraud, abuse, and instability,” Reeves told attendees at the Innovate Finance Global Summit in London.
Stablecoins Under Scrutiny – but Not Constrained
Stablecoins have grown to become a key component of global crypto markets, with over $240 billion in circulation, largely issued by US-based Circle and El Salvador-registered Tether.
The UK’s move will allow these foreign issuers to sell tokens to British investors without requiring domestic registration or authorisation.
Only firms headquartered in the UK will need to seek FCA approval, avoiding an extraterritorial burden on overseas entities.
This stands in contrast to the European Union’s Markets in Crypto-Assets (MiCA) regulation, which demands full authorisation for any issuer accessing EU investors and imposes stringent reserve and liquidity rules on so-called “significant” stablecoins.
Nick Price, a partner at Osborne Clarke, noted that the UK’s approach “appears more aligned with the US, bringing crypto assets into the existing regulatory perimeter rather than developing bespoke legislation.”
A Transatlantic Regulatory Strategy
The exemption is also the first tangible output of deeper UK-US discussions on digital finance.
Last week in Washington, Chancellor Reeves met with US Treasury Secretary Scott Bessent to discuss a broader economic relationship encompassing trade, technology, and financial services.
A joint digital securities “sandbox” to trial cross-border innovations in a lighter regulatory environment is reportedly under consideration.
Lord Peter Mandelson, Britain’s ambassador to Washington, has also championed a UK-US tech and fintech partnership as a complement to ongoing trade negotiations.
During Reeves’ visit, Mandelson hosted a high-level event on digital assets at his official residence, underscoring the strategic significance of transatlantic alignment in crypto governance.
Industry Reaction: Cautious Optimism
The crypto sector, long frustrated by the FCA’s restrictive registration practices, has largely welcomed the announcement.
“It’s a welcome development, and one that brings the UK closer to established frameworks like MiCA in the EU,” said Dima Kats, CEO of Clear Junction.
“It represents real progress – though much will depend on the detail.”
Kats added that regulators now face an increasingly complex task: balancing innovation with consumer protection while navigating the diverging regulatory philosophies of the US and EU.
“Stablecoins hold significant promise, but only when backed by robust compliance frameworks.”
With consultation on the proposed rules open for a month, the UK is signalling a more pragmatic and globally-minded approach to crypto regulation — one that favours alignment with allies, industry input, and measured oversight over rigid controls.
Whether this proves a catalyst for further investment and innovation remains to be seen, but for now, the UK is making a clear play for relevance in the fast-evolving world of digital finance.
The post UK exempts foreign stablecoin issuers in crypto regulation appeared first on Payments Cards & Mobile.