HM Treasury has released a policy note detailing the draft 2025 order under the Financial Services and Markets Act. This document outlines the intended regulatory outcomes for activities related to cryptoassets.
According to HM Treasury, the draft statutory instrument (SI) is a preliminary version aimed at identifying any technical issues that could hinder its regulatory objectives or lead to unintended consequences. The SI is part of a broader strategy unveiled by the Treasury in October 2023 to regulate cryptoassets and stablecoins under UK financial law. It introduces new regulated activities, such as operating crypto trading platforms and issuing stablecoins, which will require authorization from the Financial Conduct Authority (FCA). While UK-issued stablecoins will not yet be regulated under payment rules, the government remains prepared to adapt as their usage increases. The draft specifically focuses on defining regulated activities under the Financial Services and Markets Act 2000.
The SI modifies the Regulated Activities Order (RAO) by defining “qualifying cryptoassets” and “qualifying stablecoins,” classifying them as specified investments. It introduces new regulated activities such as issuing stablecoins, safeguarding cryptoassets, and operating trading platforms, all requiring FCA authorization. Additionally, it updates financial promotions and anti-money laundering laws to align with these changes. Tokenized deposits and e-money are clearly distinguished from stablecoins.
The draft SI also establishes the territorial scope of crypto regulation. Activities like trading, dealing, arranging, and staking involving UK consumers—whether directly or through intermediaries—require UK authorization regardless of where the firm is located. However, overseas firms serving only UK institutional clients are exempt. Safeguarding and staking activities must be authorized if conducted in the UK or on behalf of UK consumers unless directed by an authorized party. Issuers of stablecoins must be authorized only if they operate from within the UK.
HM Treasury serves as the UK’s finance ministry, responsible for overseeing public spending, economic policy, and financial regulation to support long-term growth. It manages tax systems, public sector pay, major infrastructure projects while aiming to enhance economic stability, employment opportunities, and regional competitiveness. With offices in London, Darlington, Edinburgh, and Norwich, it also emphasizes responsible taxpayer money use, financial sector oversight, and improving access to financial services.
