UK to exempt abroad stablecoin issuers from its crypto guidelines | USAEMALL.com

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Britain will exempt overseas stablecoin issuers from complying with its new cryptocurrency rules, as ministers commit to closer co-operation with the US in regulating the emerging global market for digital assets.

The proposals, set out by UK chancellor Rachel Reeves on Tuesday, are part of Britain’s first attempt to write rules for crypto assets and highlight the country’s attempts to forge a technology partnership with the US.

Reeves discussed closer tech co-operation with US Treasury secretary Scott Bessent in Washington last week, along with moves to secure a broader trade deal, intended to cut tariffs. “Talks continue,” said one British official.

The new UK crypto rules will cover exchanges and brokers, market practices such as lending and new enforcement powers for the Financial Conduct Authority, the UK’s main financial regulator, the Treasury said in a policy paper.

Britain’s push to regulate crypto assets has been given fresh impetus by US President Donald Trump’s pledge to end a regulatory crackdown and deliver a more industry-friendly approach that would make America “the crypto capital of the world”.

In a speech to the Innovate Finance Global Summit in London, Reeves said on Tuesday “robust rules” around crypto would “boost investor confidence, support the growth of fintech and protect people across the UK”.

“Today’s announcement sends a clear signal: Britain is open for business, but closed to fraud, abuse, and instability,” she added.

Stablecoins, which have become one of the most active areas of global crypto markets, are meant to maintain a steady value against a sovereign currency such as the US dollar, but the tokens sit outside the regulated banking system.

The UK plans, which will be out for public consultation for a month, will not force overseas issuers of stablecoins that want to sell to British investors to set up a business in the country and secure authorisation from regulators. Only issuers based in the UK would need British regulatory approval.

The vast bulk of stablecoins available for purchase by UK investors are issued by companies based in north and Central America.

Roughly $240bn of stablecoins are in circulation, most of them issued by El Salvador’s Tether and the US’s Circle.

US lawmakers are set to pass stablecoin rules this year that will open the door for big Wall Street and Silicon Valley tech groups to sell the tokens to investors.

But the rules are expected to stop short of forcing overseas stablecoin issuers to set up in the US if they want to sell tokens to American investors.

The UK’s planned stablecoin regulation contrasts with the stricter approach of the EU, which came into force in December.

Any company selling a stablecoin to EU investors must secure authorisation from European regulators.

Brussels also requires “significant” stablecoins to meet tough rules on liquidity and reserves.

One ally of Reeves said the chancellor and Bessent last week “talked about trade, but also about strengthening the UK-US’s economic relationship beyond tariffs, including on technology and financial services”.

The person, referring to the crypto regulation plans, added: “This is the first outcome of it.”

Reeves’ discussions with Bessent last week covered “ideas for how we could allow for greater collaboration on digital securities between the UK and US”, including a transatlantic “sandbox” that would allow start-ups to test new business ideas for digital securities in a lighter regulatory framework.

Lord Peter Mandelson, UK ambassador to Washington, is pushing for a UK-US tech partnership to be agreed alongside any trade deal to reduce tariffs on either side of the Atlantic.

Mandelson last week hosted a digital assets event at his residence to coincide with Reeves’ visit to Washington for the spring meetings of the IMF and World Bank.

Nick Price, partner at law firm Osborne Clarke in London, said the UK approach “appears more aligned with the US, bringing crypto assets into the existing regulatory perimeter rather than developing bespoke legislation for them”.

The UK’s crypto sector is likely to welcome the government’s proposals. It has been frustrated by the FCA’s rejection of almost nine out of 10 recent applications from crypto providers to register as complying with anti-money laundering rules.

Laura Navaratnam, UK policy lead at the Crypto Council for Innovation, a trade body, said the announcement marked “a big milestone for stablecoins and other crypto assets more generally in the UK”.