UK House of Lords backs mandatory digital asset strategy over Labour position

The House of Lords on Wednesday approved an amendment that would compel the Treasury to set out a formal strategy for digital assets, carrying the motion by 194 votes to 138. The change was added during the Report Stage of the Financial Services and Markets Bill and passed despite opposition from the Labour government.

Amendment 88, tabled by Conservative peer Baroness Neville-Rolfe, would require the Treasury to prepare, publish and consult on a digital asset strategy within 12 months after the Financial Services and Markets Bill becomes law. The scope of the strategy is stated to include cryptoassets, stablecoins and tokenized securities, and it would need to consider matters such as innovation, consumer protection and firms’ access to banking, payment and settlement services.

The vote follows months of parliamentary debate over how the UK should regulate digital assets. In July, the Treasury’s Minister for Investment, Lord Stockwood, argued the government already had a digital asset strategy and was implementing it; Labour peers opposed Amendment 88 on the grounds that it did not sufficiently address the rapid evolution of digital assets or provide a cohesive regulatory framework.

Industry groups reacted to the Lords’ decision: the UK Cryptoasset Business Council, which said it worked with lawmakers on the amendment, welcomed the result and pointed to Lord Chris Holmes’ wider question about whether the UK should simply regulate digital assets or build a digital assets economy. The bill must now return to the House of Commons, where MPs can accept, modify or reject the Lords’ changes before it can become law.