HM Treasury publishes draft order for cryptoasset regulation

The HM Treasury (HMT) has published a draft of The Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025, together with an accompanying policy note. The policy note explains that the draft statutory instrument:

• Amends the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ("the RAO") to (i) define "qualifying cryptoassets" and "qualifying stablecoin", and classify them as specified investments under the Financial Services and Markets Act 2000 ("FSMA"); and (ii) specify certain activities related to these assets as regulated activities, such that persons carrying on those activities need to be authorised for that activity by the FCA.
• Amends FSMA as a consequence of the RAO amendments, in particular to set the geographic perimeter for the new regulated activities.
• Amends the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 ("FPO") to align it with the new regulatory perimeter.
• Makes consequential amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ("MLRs") to reflect the new regulatory perimeter.

The draft statutory instrument makes further consequential amendments to ensure that:

• "Qualifying stablecoin" backing assets are not considered either an alternative investment fund (AIF) or collective investment scheme (CIS).
• There is a clear distinction between qualifying stablecoin and tokenised deposits, and electronic money, through an amendment to the Electronic Money Regulations 2011.

The planned market abuse and admissions and disclosures provisions will be published in due course. The deadline for technical comments is 23 May.

You may like to see our client bulletin, "The UK Future Cryptoasset Regulatory Framework" in which we discuss the impact of the draft legislation.