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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.
