On the Record by Bitcoin Policy UK

Response to HM Treasury on Cryptoassets Regulation Part 1

Bitcoin Policy UK Episode 39

In this episode, we present an audio version of Part 1 of Bitcoin Policy UK’s response to HM Treasury on Cryptoassets Regulation, originally published on 26 April 2023.

This submission sets out a clear and principled framework for how cryptoassets should be regulated in the UK, starting with a crucial distinction that policymakers too often ignore: Bitcoin is fundamentally different from all other cryptoassets.

The paper argues that regulation should focus on activities and intermediaries, not the Bitcoin protocol itself, and warns that poorly targeted rules risk being both unenforceable and economically damaging.

🔑 Key themes covered in this episode

  • Why Bitcoin must be treated separately from “crypto”
    Bitcoin has no issuer, no controlling mind, and no governance mechanism that regulators can influence, unlike almost every other token.
  • Decentralisation and enforceability
    Why attempting to regulate Bitcoin nodes or miners is both disproportionate and practically impossible.
  • Preventing customer harm where it actually occurs
    The case for prioritising regulation of exchanges, custodians, and token listings, not peer-to-peer infrastructure.
  • Mining, nodes, and regulation overreach
    Why running Bitcoin software is not a financial activity and should not fall within the regulatory perimeter.
  • Territorial scope and reality checks
    How Tor, VPNs, and global node distribution undermine attempts at jurisdiction-based enforcement.
  • Stablecoins, lending platforms, and real risks
    Lessons from Celsius and other failures, and why transparency, reserves and disclosure matter.
  • Financial promotions and ‘positive frictions’
    Why the UK risks driving compliant firms offshore while disadvantaging domestic businesses.
  • Bitcoin as commodity money, not a financial liability
    How Bitcoin differs from bank money, central bank money, and most digital assets.

📄 Read the full written paper here:
👉  Response to HM Treasury on Cryptoassets Regulation Part 1

To find out more about Bitcoin Policy UK's work and how you can get involved, visit:

https://bitcoinpolicy.uk/