UK Crypto Progress Stalls as Labour Puts Reforms on Hold

@Roy, this matter is related to regulation and policy development in the UK’s crypto landscape, so I’m assigning it to you.

@Lilly, this involves legal frameworks and regulatory changes, so I’ll need your expertise to manage the broader implications.

Key Event Breakdown:

The UK crypto industry has been advocating for more favorable regulations, with some progress visible but still slow. Under PM Keir Starmer's Labour government, efforts to transform the UK into a crypto hub, as promised by previous administrations, appear cautious and piecemeal. Encouraging regulatory signs, like HM Treasury consultations and potential legislation recognizing digital assets as property, suggest gradual movement. However, the UK's pace lags behind jurisdictions like the EU and US, potentially driving talent and capital elsewhere. Industry groups continue pushing for improved recognition of stablecoins, fairer financial access for crypto businesses, and nuanced regulation.

To the Editor-in-Chief:

According to a Cointelegraph report on July 24, 2025, the UK's crypto industry is experiencing a mix of cautious optimism and significant frustration over the slow pace of regulatory reform under Prime Minister Keir Starmer's Labour government. While there are encouraging signs of progress, the prevailing sentiment is that the UK is lagging behind other major jurisdictions, potentially driving talent and capital elsewhere.

The Labour government's approach to cryptocurrency has been described as cautious, with the issue taking a backseat to other national priorities. This marks a shift from the previous Conservative government's vocal ambition to establish the UK as a global crypto hub. Industry leaders are concerned that this slow momentum puts the UK at a disadvantage compared to the European Union, which has its Markets in Crypto-Assets (MiCA) framework, and the United States, which is also making legislative progress.

Despite the delays, there are positive developments. An HM Treasury consultation in April 2025 and a draft statutory instrument aim to bring cryptoasset activities within the UK's financial services regulatory perimeter. A key legislative effort is the Property (Digital Assets, etc.) Bill, which seeks to have digital assets legally recognized as property. Having passed its third reading in the House of Lords, the bill is now awaiting consideration of amendments in the House of Commons, with its second reading scheduled for July 16, 2025.

Industry bodies like CryptoUK are actively campaigning for more decisive regulatory action. Their key demands include the formal recognition of stablecoins as a payment form, fairer banking and financial services access for digital asset companies, and nuanced advertising rules. There is also significant industry pushback against the government's reported plans to sell nearly $7 billion in seized Bitcoin to supplement the budget, a move that some critics argue is short-sighted and sends the wrong message to the crypto community.

Roy, your piece needs to cut through the noise and focus laser-sharp on the regulatory developments impacting the UK crypto landscape. Start by clearly summarizing the frustration within the industry—balancing cautious optimism with concerns over the UK's slow progress compared to jurisdictions like the EU and US. Highlight key events such as the advancement of the Property (Digital Assets, etc.) Bill and HM Treasury’s recent consultation without bogging down the narrative. Avoid rehashing background details; instead, center the article on what’s happening now and why industry leaders view it as critical. Keep the tone informed and concise while clearly framing the implications for talent, investment, and policymaker priorities.

UK Crypto Progress Stalls as Labour Puts Reforms on Hold

• Progress stalls under Labour’s cautious approach to crypto rules.
• EU and US reforms leave UK lagging in global competition.

On July 24, 2025, Cointelegraph reported that regulatory delays under Labour’s government are driving concerns of capital flight, despite signs of gradual progress. Industry participants warn that the UK's slow-moving regulatory framework risks undermining its competitiveness in the global cryptocurrency landscape, prompting talent and capital to seek more favorable jurisdictions.

The Labour government has shifted its focus to other national priorities over cryptocurrency legislation, a marked change from preceding Conservative leadership that sought to elevate the UK as a global hub for digital assets. Critics argue that this hesitancy has left the UK trailing behind regions like the European Union, which has implemented the comprehensive Markets in Crypto-Assets (MiCA) framework, and the United States, where significant progress is being made in advancing legislative agendas for digital assets.

Nonetheless, there are emerging indications of incremental progress. HM Treasury’s April 2025 consultation proposed integrating cryptoasset activities into the existing financial services framework. Similarly, the Property (Digital Assets, etc.) Bill—designed to grant digital assets legal recognition as property—has made headway in Parliament. The bill cleared its third reading in the House of Lords and is set for a second reading in the House of Commons on July 16, 2025.

Advocacy groups like CryptoUK remain vocal in their efforts to expedite regulatory reforms. They have laid out a range of recommendations, including recognizing stablecoins as a valid payment mechanism, improving banking access for digital asset firms, and establishing coherent advertising rules for the sector. On the other hand, the Labour government’s reported intention to liquidate approximately $7 billion in seized Bitcoin has faced sharp criticism. Industry voices argue that such a decision undermines confidence in the UK’s commitment to fostering a robust and sustainable cryptocurrency market.

As of July 24, 2025, 15:09 UTC, Bitcoin (BTC) is trading at $119,506.08, reflecting a 1.18% change within the last 24 hours, per CoinMarketCap. Tether USDt (USDT) is trading at $1.001 with a marginal change of 0.003%, while XRP has dipped to $3.251, marking a 1.46% decline in the same period.