The Bill sets out a bold, post-Brexit roadmap to make the United Kingdom the world’s premier hub for cryptocurrency and blockchain innovation.
10% Capital Gains Tax on Crypto
- A single 10% CGT rate will apply to gains on cryptocurrencies and eligible blockchain-based digital assets, overriding higher rates in existing tax law while preserving the tax-free allowance for chargeable gains.
- It is anticipated that this will result in a significant increase in revenue for HM Treasury, as a result of onshoring, increased transactions and tax compliance.
- This clear, low headline rate mirrors the City’s historic success with corporation tax cuts and would be impossible under the EU’s mandatory minimum-tax directives.
Two-Year Regulatory Sandbox
- The FCA, with HM Treasury, will run a two-year Blockchain Financial Services Sandbox open to large financial institutions and designated firms, granting temporary relief from selected rules while maintaining core AML/CTF safeguards.
- This will ensure the City of London is given a chance to catapult itself to once again be a global leader in finance, fit for the new digital age.
- Within 90 days of the sandbox ending, regulators must publish findings and propose permanent reforms.
Banking Non-Discrimination Duty
- It will be illegal for Banks and payment providers to deny or withdraw services solely because a customer deals in lawful cryptoassets.
- The burden of proof lies on the bank to show any refusal is for legitimate, non-crypto reasons.
- This will mean no bank can de-bank a consumer just because they wish to own, trade or transact in crypto.
Sovereign Bitcoin Reserve Fund
- HM Treasury will create and manage a Bitcoin Reserve Fund as part of the UK’s official reserves, diversifying holdings, signalling confidence in digital assets and capturing potential long-run appreciation.
- Quarterly public reporting and an annual independent audit will ensure transparency.
Paying Taxes in Cryptocurrency
- HMRC must build systems to accept Bitcoin (and other approved crypto) for tax liabilities, using HMRC- published GBP exchange rates at the time of payment.
- Crypto collected can be converted into sterling or added to the Bitcoin Reserve Fund.
Rapid Policy-Making Timelines
Any government taskforce or commission on crypto is limited to 90 days (extendable by 30 days only with parliamentary approval) to prevent bureaucratic drift and keep the UK well ahead of slow EU processes.