Crypto enters the UK retail scene
Cryptocurrency is no longer a fringe concept. In 2025, over 15,000 businesses globally – including a growing number in the UK – are accepting digital currencies like Bitcoin and Ethereum. From fashion and electronics to hospitality and e-commerce, crypto is becoming a viable payment method and a tool for customer engagement.
Retailers are exploring crypto not only for payments but also for loyalty programmes. Brands like Nike and Starbucks have piloted blockchain-based rewards, offering tokenised incentives that customers can trade or redeem across platforms. These innovations appeal to tech-savvy consumers and signal a brand’s commitment to digital transformation.
However, as crypto becomes embedded in retail, so too does regulatory scrutiny. Retailers entering this space must now navigate a complex and evolving legal landscape – one traditionally reserved for financial institutions.
The UK regulatory framework: turning up the scrutiny
The UK’s Financial Conduct Authority (FCA) has taken significant steps to bring crypto within its regulatory perimeter. Since October 2023, promotions of qualifying cryptoassets have been subject to the FCA’s financial promotions regime. This means any marketing must be fair, clear, and not misleading, and include standardised risk warnings. Incentives like “refer-a-friend” bonuses are banned, and a 24-hour cooling-off period is required for first-time investors.
Retailers promoting crypto-based loyalty tokens or encouraging customers to hold digital assets may inadvertently fall within these rules. Even simple messaging – such as highlighting the investment potential of a token – could trigger compliance obligations.
Anti-money laundering (AML) regulations also apply. Under the Travel Rule, crypto transactions must include verified sender and recipient information. Retailers using third-party payment processors must ensure those partners are FCA-registered and compliant with AML standards, especially for cross-border transactions.
Consumer protection is another key concern. Crypto payments do not benefit from section 75 of the Consumer Credit Act or the Financial Services Compensation Scheme. Refunds, chargebacks, and dispute resolution mechanisms remain limited. Retailers must clearly communicate these limitations and establish robust refund policies for crypto transactions.
Tax compliance is equally important. HMRC treats crypto as a form of payment subject to VAT, calculated in sterling at the point of sale. Accurate record-keeping of exchange rates and transaction values is essential for reporting obligations.
Practical recommendations for navigating crypto compliance
To navigate this space safely:
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Use FCA-registered crypto payment processors that offer automatic conversion to GBP to mitigate volatility and reduce compliance burdens.
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Review marketing materials to ensure they do not constitute unauthorised financial promotions. Avoid language that implies investment advice or guaranteed returns.
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Update terms and conditions to address crypto-specific risks, including refund policies, transaction errors, and customer responsibilities.
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Monitor regulatory developments, particularly around stablecoins, which are expected to be regulated as payment instruments in the near future.
Why this matters for retailers and their advisors
Crypto’s integration into retail is accelerating. For retailers, it offers a competitive edge and access to a growing demographic of digital-native consumers. But with opportunity comes responsibility. The regulatory environment is tightening, and missteps can lead to reputational damage or enforcement action.
Retailers must approach crypto adoption with eyes wide open. With the right legal guidance and compliance frameworks, businesses can innovate confidently – turning crypto from a risk into a strategic advantage.
As a law firm with deep expertise in retail and financial regulation, we are well-positioned to help clients navigate this evolving space. Whether you’re exploring crypto payments, launching a tokenised loyalty programme, or reviewing your compliance posture, we’re here to support your journey into the future of retail.
Written by Matthew Burgess, paralegal in our Commercial and Private Client Litigation team.