UK digital asset strategy wins House of Lords backing in 194–138 vote

The UK House of Lords has 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.

UK digital asset strategy amendment sets a 12-month deadline

UK Parliament voting records show that Baroness Neville-Rolfe moved Amendment 88 during the bill’s Report Stage on Sep. 9, with 194 peers voting in favor and 138 opposing it. Conservative and Liberal Democrat members provided most of the support, while 127 Labour peers voted against the proposal.

Added after Clause 46, the amendment requires the Treasury to prepare, publish and consult on a strategy for regulating and developing digital assets and related financial market infrastructure. The 12-month deadline would begin on the date the bill receives Royal Assent.

The amended bill now lists the digital asset strategy as Clause 50. Its scope includes cryptoassets, qualifying stablecoins, central bank digital currencies, tokenized securities and other digital or tokenized financial products.

Treasury officials would also have to examine how digital asset businesses operate under current UK legal and market conditions. Banking access forms part of the required review, including whether firms can obtain and retain payment, settlement, and other financial services.

Under the clause, the government must consider risks to competition and lawful market participation when banks or payment providers deny services through blanket policies or assessments that do not account for the risk of each business.

Consumer protection, market integrity, financial stability and the UK’s international competitiveness also sit within the proposed strategy. The Treasury could identify legislative or regulatory changes after reviewing how current and planned rules work together.

Preparing the document would require consultation with the Bank of England, the Prudential Regulation Authority, the Financial Conduct Authority, and industry groups. The Treasury could include other parties when it considers their input necessary.

Peers say separate rules need one policy framework

During a July committee debate, Neville-Rolfe argued that the UK’s work on cryptoassets, tokenization and digital payments lacked a single policy framework. She told peers that more than one in 10 UK adults owned a digital asset and said firms needed clearer information about regulators’ responsibilities.

The Conservative peer also drew a distinction between government support for tokenization and a plan that assigns responsibilities across the Treasury, FCA, PRA, and Bank of England.

“The Government have repeatedly said that tokenisation is an area in which the UK could become a global leader. I agree, but that is ambition, not strategy,” Neville-Rolfe said.

Lord Ranger of Northwood raised banking access as a practical obstacle for registered or regulated digital asset firms. According to his comments in Parliament, some companies with compliance systems and legitimate operations still struggle to secure bank accounts or use payment and settlement services.

Lord Chris Holmes backed the effort to place the framework in law. In comments cited by the UK Cryptoasset Business Council after the vote, Holmes asked whether the country was “simply regulating digital assets” or “building a digital assets economy.”

The question covers more than retail crypto trading. UK banks and financial infrastructure providers are testing tokenized deposits, digital collateral and blockchain settlement systems that require rules on ownership, custody and final settlement.

Institutional projects have already moved beyond isolated blockchain tests. A recent report on bank tokenization projects found that Cosmos had formed a 17-company provider network covering custody, compliance, security, and infrastructure. Wells Fargo plans to use its ledger technology for an initial cross-border tokenized deposit project in fall 2026.

London-based Fnality is also expanding a wholesale blockchain payment system that settles obligations with money backed by central bank funds. Coverage of its settlement network expansion noted that its regulated sterling system launched in 2023, while the company is seeking approvals for dollar- and euro-denominated versions.

Labour says existing digital asset work is sufficient

The Labour government opposed putting the strategy requirement into the bill. During the July debate, Investment Minister Lord Stockwood said the government already had a program covering crypto regulation, wholesale market digitization, tokenization and payment infrastructure.

Stockwood pointed to the Wholesale Financial Markets Digital Strategy and the appointment of Chris Woolard as Wholesale Digital Markets Champion. Woolard has established a cross-sector task force and is expected to report to the chancellor on the adoption of distributed ledger technology in wholesale markets.

The minister also cited work by the Bank of England and FCA, including the Digital Securities Sandbox and a joint request for industry views on tokenization. In the government’s assessment, existing channels already allow regulators to consult financial firms without a statutory industry forum.

“I think that the existing strategy and ongoing work provide the most effective route forward,” Stockwood told peers in July.

On banking access, he said the government recognized difficulties faced by some digital asset businesses but described account and service decisions as commercial matters. Once the UK crypto regime begins, firms providing covered services will need FCA authorization.

Stockwood said licensed companies should not face restrictions solely because they operate in the digital asset sector. He also argued that the existing financial services framework could extend complaints procedures and Financial Ombudsman protections when new crypto activities enter regulation.

The government’s opposition did not prevent the amendment from entering the Report Stage version of the bill. Support from Conservative, Liberal Democrat, and several unaffiliated peers gave the proposal a 56-vote majority.

U.S. rules give UK lawmakers a policy comparison

For U.S. investors and institutions operating in both markets, the UK debate overlaps with American work on stablecoins, tokenized securities and crypto market structure.

Recent crypto.news coverage of an SEC transfer agent proposal reported that distributed ledgers could become the official ownership record for regulated securities. Under the proposal, issuers and transfer agents could avoid maintaining a separate off-chain shareholder register, although identity checks, transfer restrictions and other securities rules would continue to apply.

The UK amendment requires the Treasury to consider developments in other jurisdictions when preparing its strategy. Neville-Rolfe specifically named the United States, the European Union, Singapore, Switzerland, and Hong Kong during the July debate.

U.S. lawmakers, however, have continued negotiating their own division of regulatory duties. The CLARITY Act negotiations have included disputes over consumer protections, conflicts of interest, and vertically integrated companies that combine exchange, custody, or trading functions.

Unlike the SEC proposal, the Lords’ amendment would not create detailed operating rules for a particular digital asset or market participant. It would require the Treasury to explain how the UK’s separate crypto, stablecoin, tokenization and settlement initiatives fit within one strategy.

House of Commons will decide whether the clause survives

The Financial Services and Markets Bill began in the House of Lords and remains subject to the remaining stages of the parliamentary process. After its third reading in the Lords, the bill must move through readings, committee review, and Report Stage in the House of Commons.

Members of Parliament can accept the digital asset strategy clause, change its wording, or remove it. Any Commons amendments would return to the Lords for consideration before both chambers agree on the same text.

Only after Parliament approves the final version and the bill receives Royal Assent would the Treasury’s 12-month deadline take effect.