As of 1 January 2026, encrypted asset companies operating in the United Kingdom will be required to collect and report detailed user and transaction data under the new framework introduced by the tax authorities. This is intended to combat tax evasion and to bring the transparency of encrypted money into line with banking.
New regulation and implications
The new regulations require the Platform to identify each user and to record its legal details, address and tax identification number. In addition, all transactions involving British users or those involved in CARF countries must be documented in detail, including information on value, type of asset, quantity and nature of the transfer. Even foreign companies that serve British clients are required to comply with these provisions, otherwise they face a fine of up to £300 per user.
While the new regulations will only be implemented in 2026, the authorities encourage businesses to start collecting relevant data now to ensure that compliance is ready. This change stems from the United Kingdom's adoption of the Encrypted Asset Reporting Framework, a global standard aimed at combating tax evasion and increasing the transparency of encrypted currencies.
Industry response and outlook
Although the new provisions were considered burdensome, financial technology companies such as Revolut welcomed them. In late April, the Minister of Finance, Rachel Reeves, announced the draft legislation for the inclusion of encrypted exchanges, distributors and trustees in the regulatory framework, and pledged to strengthen the monitoring of consumer protection and operational resilience. “A strong code of encryption will enhance investor confidence, support the growth of financial technology and protect the entire British people”, Reeves said.
In addition, the United Kingdom has suggested closer regulatory cooperation with the United States, proposing the idea of a transatlantic digital asset sandbox as part of its “change plan” as part of its economic agenda. Block chains such as Ripple view this as a great market opportunity, and the prospects for the British market are clearer as new rules approach.
In contrast to the European Union's MiCA rules, the United Kingdom chose to integrate its encrypted assets into the existing financial framework rather than to establish a fully independent system. This includes the coverage of borrowing, pledge and currency stabilization under traditional financial law, without the need for overseas currency stability issuers to be authorized or capped in the UK. This means a more open and globalized strategy than the EU.