Financial Services and Markets Act 2023

Section 69 is the central cryptoasset perimeter provision. It amends FSMA 2000 so that HM Treasury’s powers over financial promotions and regulated activities can be used for cryptoassets. It also inserts a cryptoasset definition into FSMA 2000 and gives HM Treasury a power to amend that definition by affirmative statutory instrument. This allows future secondary legislation to specify cryptoasset activities under the existing UK financial-services architecture rather than relying only on anti-money laundering registration.

The Act also creates a statutory foundation for digital settlement assets. The explanatory notes describe a digital settlement asset as a digital representation of value or rights that can be used to settle payment obligations, can be transferred, stored or traded electronically, and uses technology supporting the recording or storage of data. The Act enables HM Treasury, the Financial Conduct Authority, the Bank of England and the Payment Systems Regulator to supervise payment systems and service providers using such assets, including stablecoin arrangements that may become systemically important.

The wider structure of the Act is designed to move the UK from retained EU financial-services law toward a domestic FSMA model. Under that model, Parliament sets the statutory architecture, HM Treasury defines the perimeter through secondary legislation, and regulators write detailed rules. The Designated Activities Regime allows HM Treasury to designate certain financial-market activities and empower the FCA to make rules for those activities, including where the activity relates to cryptoassets.

The Act also supports financial market infrastructure sandboxes. These sandboxes are intended to let regulators test temporary modifications to legislation for trading, settlement and related market infrastructure functions, including uses of distributed ledger technology. For a crypto law profile, this is relevant to tokenization and digital securities infrastructure, not only retail token trading.

FSMA 2023 is best understood as enabling legislation. It creates the legal scaffolding for the UK to regulate cryptoassets through the existing financial-services perimeter, while leaving much of the operative detail to statutory instruments and regulator rules. Its crypto relevance spans financial promotions, regulated activities, stablecoin payment systems, designated activity rules, tokenized market infrastructure and future FCA supervision. Editors should distinguish this Act from later instruments, especially the 2026 Cryptoassets Regulations, which implement more specific obligations for firms.