The UK House of Lords voted 194-138 to require the Treasury to publish and consult on a national digital asset strategy within 12 months of the Financial Services and Markets Bill becoming law. According to voting records, Baroness Neville-Rolfe moved Amendment 88 during the bill's Report Stage on Wednesday, with Conservative and Liberal Democrat members providing most support while 127 Labour peers voted against the proposal. The amendment, added after Clause 46, now lists the digital asset strategy as Clause 50 in the amended bill. As reported by TradingView News, the vote came despite the Labour government's opposition to the measure, demonstrating the parliamentary majority's commitment to establishing a comprehensive digital asset framework.
The amended bill requires the Treasury to prepare, publish and consult on a strategy for regulating and developing digital assets and related financial market infrastructure. As reported by Parliamentary records, the 12-month deadline would begin on the date the bill receives Royal Assent. The strategy's scope includes cryptoassets, qualifying stablecoins, central bank digital currencies, tokenized securities and other digital or tokenized financial products. According to TradingView News, the strategy would cover cryptoassets, stablecoins and tokenized securities, while addressing issues including innovation, consumer protection and firms' access to banking, payment and settlement services. The UK Cryptoasset Business Council, which worked with lawmakers on the amendment, welcomed the vote on Thursday, highlighting the importance of building a comprehensive digital assets economy rather than simply regulating digital assets. The practical implementation will require the Treasury to structure consultations with the Bank of England, Prudential Regulation Authority, Financial Conduct Authority, and industry groups, covering consumer protection, market integrity, financial stability and UK competitiveness.
During the July committee debate, Neville-Rolfe argued that the UK's work on cryptoassets, tokenization and digital payments lacked a single policy framework, noting that more than one in 10 UK adults owned a digital asset. The Conservative peer drew a distinction between government support for tokenization and assigning responsibilities across the Treasury, FCA, PRA and Bank of England. The strategy would require consultation with the Bank of England, Prudential Regulation Authority, Financial Conduct Authority, and industry groups, covering consumer protection, market integrity, financial stability and UK competitiveness. The amendment's inclusion reflects continued parliamentary debate over whether the government already has an effective strategy in place, with supporters seeking not only regulatory rules but also a clear, time-bound plan that explains how the government intends to balance market development with protection of users and operational realities for regulated firms.
The Labour government opposed putting the strategy requirement into the bill, with Investment Minister Lord Stockwood stating the government already had a program covering crypto regulation, wholesale market digitization, tokenization and payment infrastructure. According to Stockwood's comments, the government pointed to the Wholesale Financial Markets Digital Strategy and the appointment of Chris Woolard as Wholesale Digital Markets Champion. The minister cited existing channels for regulators to consult financial firms and argued that the existing financial services framework could extend complaints procedures and Financial Ombudsman protections when new crypto activities enter regulation. The ruling Labour party opposed the amendment because they believed it did not adequately address the rapid development of digital assets and the need for a cohesive regulatory framework. As reported by TradingView News, the Labour opposition questioned whether the UK was simply regulating digital assets or building a digital assets economy, with the party's position being that the proposal did not go far enough in responding to the speed at which digital assets are evolving and in delivering what Labour viewed as a genuinely cohesive regulatory approach.
Recent HMRC data published on August 27 reveals significant challenges in traditional wealth management for crypto millionaires. 240 UK taxpayers declared capital gains exceeding £1 million each from crypto in the 2024-25 tax year, accounting for £717 million in declared gains out of £1.38 billion reported by all 17,600 UK taxpayers who filed crypto capital gains that year. However, offshore trust companies are rejecting crypto millionaires seeking to place digital-asset wealth in traditional estate structures due to verification concerns. As reported by Financial Times, trustees cite an inability to verify how the money was made, with only a small number of trustees comfortable holding cryptocurrency. The core issue stems from fiduciary responsibilities, as trustees assume long-term responsibility for custody, valuation, and legal compliance, while wallet addresses prove assets exist but not ownership or legitimate earnings. The collapse of FTX in 2022 reinforced trustee caution, as holding client crypto on failed exposes them to personal liability questions traditional asset custody doesn't raise. HMRC is implementing the Cryptoasset Reporting Framework (CARF) from January 2026, with service-provider data expected to flow from 2027, though providers who fail CARF reporting face penalties of up to £300 per user.
