Crypto’s Regulatory Turn: London Makes its Move

This week, UK Chancellor Rachel Reeves and US Treasury Secretary Scott Bessent met in London to align crypto regulation, starting with stablecoins.

In a move that signals deeper financial integration with the US and a clear pivot away from Brussels, the two sides agreed to explore joint frameworks, harmonise disclosure and custody standards (and build a digital securities sandbox).

Leaders from Coinbase, Ripple, Circle, Barclays, Citi and Bank of America were present to seal a deal that lets crypto firms operate across both markets with less friction, faster approvals and lighter legal overhead.

All of which sound sensible - apart from the UK's appalling record of sandbox success in financial services, which has operated more like a theatre rehearsal directed by cautious civil servants. Not exactly dynamic.

What are stablecoins?

Stablecoins are digital tokens pegged to fiat currencies, usually the dollar. They’re used to move money across borders, settle trades and power crypto markets without touching traditional banks.

The biggest players, like Tether and Circle, manage tens of billions in reserves. If stablecoins go mainstream, they could bypass old payment rails, challenge central banks and reshape how value flows.

Stablecoins are the bridge between crypto and the real economy.

They're fast, programmable and borderless. If poorly regulated, they could trigger bank runs or dodge oversight. If regulated well, governments would have a lever to shape digital finance.

The EU has already passed MiCA, its flagship crypto law. But implementation is fractured. Member states interpret the rules differently. Malta is actively resisting efforts to give more power to the EU’s central securities watchdog (ESMA). France and Italy want tougher oversight. Others want more flexibility.

The UK wants to stop crypto capital drifting to New York. The US wants a trusted partner without Brussels’ bureaucracy. For firms like Circle, Ripple and Gemini, which is just off a $425 million IPO, UK–US alignment could streamline operations and unlock markets at a time when growth is weak.

And in other news..

UK FCA proposes rule waivers for crypto firms
The UK Financial Conduct Authority is planning to bring crypto firms under broader regulatory oversight next year, but wants to waive certain rules considered ill‑fitting for crypto. Those include standards around business conduct, senior management requirements, and some customer protections.

BoE's proposed stablecoin caps draw fire
The Bank of England is considering limits on how much “systemic stablecoin” any one person or firm can hold. Industry groups say the caps are hard to enforce, risk stifling innovation or driving business abroad. The outrage.

Tether enters regulated stablecoin race with USA₮
Tether has launched a US regulated, dollar‑backed stablecoin called USA₮. It’s intended to compete more directly with Circle’s USDC under the new GENIUS Act regime.

HashKey starts $500 million digital treasury fund
Hong Kong’s HashKey Group (a licensed exchange) has launched a $500 million Digital Asset Treasury fund. The fund will hold mainstream crypto assets (e.g. BTC, ETH) and aims to establish HashKey as a standard‑setter in digital asset portfolios in Asia and globally. Reuters

Global adoption surges in APAC
According to Chainalysis, the Asia‑Pacific region saw ~69% year‑on‑year growth in on‑chain transaction volume in the 12 months ending June 2025. India, Vietnam and Pakistan are key contributors.

Sterling stablecoin push in the UK
A report out of Imperial College warns that the UK is falling behind by not having a strong sterling‑denominated stablecoin infrastructure. It says this exposes businesses to FX risk and increases dependence on USD or EUR stablecoins.