The United Kingdom will begin enforcing a major change in its cryptocurrency regulation starting from January 1, 2026. The new requirement compels all crypto firms operating within the country to collect and report full user and transaction data.
The rule aims to increase financial transparency and reduce tax evasion through global coordination with the Crypto Asset Reporting Framework. Firms must record each user’s name, home address, tax identification number, and every transaction’s asset type, value, and quantity.
They must also document whether the transfer involves a UK user or one based in another participating nation. Even companies based abroad but serving UK clients must follow these rules. Those that fail to submit complete or correct information may receive fines of up to £300 per user.
Chancellor Rachel Reeves recently shared the government’s plan to bring crypto dealers, custodians, and exchanges under formal regulation.
She stated this change will improve investor confidence and ensure better protection for people across the country. Her announcement came during UK Fintech Week and supports the broader “Plan for Change” agenda set by the Treasury.
New UK framework aligns with global Crypto regulations
The framework’s open design contrasts with the EU’s new Markets in Crypto-Assets (MiCA) rules. Unlike MiCA’s tight bloc-level restrictions, the UK is integrating crypto within its existing financial system.
This means no special licenses are needed for stablecoins issued overseas, nor will there be hard limits on how much can be traded or held. The finance sector has had mixed reaction. Fintech businesses such as Revolut welcome the regulations despite their strictness.
Blockchain firm Ripple also believes the UK has future growth prospects as rules become more transparent. Regulators suggest the crypto platforms start preparing now, albeit with the implementation scheduled for 2026. Starting sooner will save them from costly blunders and allow them seamless integration into the future economy of the UK.
