The UK government suffered a defeat in the House of Lords on Wednesday as peers backed an amendment requiring the Treasury to draw up a national strategy for regulating digital assets.
The upper chamber approved the measure by 194 votes to 138, with Conservative and Liberal Democrat peers combining against a near-solid bloc of Labour votes. Baroness Neville-Rolfe, a Conservative former Treasury minister, moved the amendment to the Financial Services and Markets Bill.
The new clause, titled “Digital assets strategy,” would require the Treasury to prepare, publish and consult on a strategy for regulating and developing digital assets and related digital financial market infrastructure in the UK.
The regulation of digital assets includes “cryptoassets, qualifying stablecoins, Central Bank Digital Currencies, tokenised securities and other digital and tokenised financial assets,” according to the draft.
The UK is in the process of drafting a sweeping new crypto bill. The country’s Financial Conduct Authority finalised its regulatory framework for cryptoassets in June, with the regime due to take effect on 25 October 2027. The authorisation gateway for firms opened on 30 September and runs to 28 February 2027.
Britain is trailing behind Brussels and Washington with digital asset regulation. The EU’s Markets in Crypto-Assets regulation has applied to service providers since 30 December 2024.
And the U.S. under President Donald Trump signed the GENIUS Act into law in July 2025, establishing a federal framework for dollar-backed tokens. Broader market-structure legislation remains unfinished: the Clarity Act cleared the House in July 2025 by 294-134 but has been stuck in the Senate over DeFi, stablecoin yield and ethics provisions, with a procedural vote set for next week.