The department said it will launch a public consultation in coming months as part of the plan.
"The UK's reputation for clean, transparent markets makes it an attractive global financial centre. We're planning to bolster this by taking a targeted new power to block listings that pose a national security risk, and will launch a consultation to inform its design in the coming months," a treasury spokesperson said in an emailed statement.
The statement comes after finance minister Rishi Sunak said earlier this year that Britain will modernise its listing rules to attract more high-growth company and blank cheque flotations.
Earlier in March, Britain's financial regulator, the Financial Conduct Authority, said Britain will use its freedom from European Union rules to regulate markets flexibly and make the City of London even more attractive to global investors.
Sunak's move to block London stock listings on security grounds was previously reported by the Financial Times.
Two brothers and founders of Cape Town-based cryptocurrency investment platform, Africrypt, have disappeared, potentially making off with $3.