The UK and US governments are set to deepen collaboration on cryptocurrency regulation, aiming to align oversight frameworks, strengthen market supervision, and mitigate regulatory arbitrage.

Executive Summary

Recognizing the growing digital asset markets, the United Kingdom and the United States are preparing to announce expanded cooperation on cryptocurrency regulation. This initiative seeks to harmonize oversight frameworks, reinforce supervision of digital asset markets, and reduce the potential for regulatory arbitrage between jurisdictions. The move is underpinned by the UK's draft crypto-asset regime, published in April 2025, and the US's GENIUS Act, which became law in July 2025.

The Event in Detail

Chancellor of the Exchequer Rachel Reeves revealed the initiative during UK Fintech Week on April 29, emphasizing the need for international cooperation to ensure the responsible growth of digital assets. The collaboration will primarily focus on critical areas including market conduct, anti-money laundering (AML) standards, and stablecoin regulation. Discussions have involved figures such as US Treasury Secretary Scott Bessent, with plans for continued engagement through the UK-US Financial Regulatory Working Group.

Deconstructing Regulatory Frameworks

The UK's draft crypto-asset regime, specifically the Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025, proposes bringing "qualifying cryptoassets" and "qualifying stablecoins" under the regulatory purview of the Financial Conduct Authority (FCA). This framework includes proposals for conduct and prudential requirements for firms issuing stablecoins and for those safeguarding cryptoassets. Similarly, the US GENIUS Act establishes a comprehensive federal regulatory framework for payment stablecoins, including detailed rules on reserve backing, audits, and transparency. The White House Digital Assets Report further emphasizes the clear and rapid implementation of the GENIUS Act's requirements and calls for consistent oversight, a clear division of responsibility between the SEC and CFTC, and robust AML and sanctions controls.

Business Strategy and Market Positioning

This transatlantic alignment reflects both nations' strategic objectives. The UK has explicitly positioned itself as a potential global hub for digital assets, aiming to boost investor confidence and foster fintech growth by implementing robust rules. The new framework will require crypto exchanges, dealers, and agents with UK customers to meet clear standards for transparency, consumer protection, and operational resilience, similar to those in traditional finance. The exemption of overseas stablecoin issuers from certain UK regulations also aligns with a broader policy to enhance tech cooperation with the US. For both the UK and US, the strategy aims to mitigate risks associated with fragmented regulatory approaches while fostering innovation, a critical balance highlighted by both Chancellor Reeves and the US Digital Assets Report.

Broader Market Implications

The expanded cooperation is anticipated to have significant implications for the broader Web3 ecosystem. By reducing regulatory arbitrage—where firms exploit gaps between jurisdictions—the initiative could lead to a more mature and stable global digital asset market. Increased regulatory clarity and harmonized standards are generally viewed as beneficial for institutional adoption, potentially drawing more traditional financial players into the crypto space. This coordinated transatlantic approach could also exert pressure on other jurisdictions, including members of the EU and Asia-Pacific, to harmonize their own crypto rulebooks, thereby contributing to the development of global regulatory standards for the industry. The long-term impact is expected to foster an environment conducive to innovation while safeguarding consumers and financial integrity.