The United Kingdom is gearing up to enact fresh legislation regulating stablecoins and crypto staking within the next six months.
Economic Secretary to the Treasury Bim Afolami revealed this timeline while speaking at a crypto event hosted by Coinbase in London on Feb. 19, as reported by Bloomberg. Afolami clarified that the government is committed to passing the new laws ahead of this year’s general election.
“We’re very clear that we want to get these things done as soon as possible. And I think over the next six months, those things are doable,” Afolami said.
When pressed for specific details regarding the awaited crypto regulation, Afolami stated: “Short answer is, I don’t know… There’s just a huge amount going on, so I don’t want to commit to that now.”
Back in 2022, UK Prime Minister Rishi Sunak pledged to position the country as a “global crypto hub,” underlining the importance of enabling crypto firms to invest, innovate, and expand within the UK. Despite this pledge, progress on regulation has been slow, with crypto firms operating in the UK advocating for clearer rules.
On July 3, 2023, the UK Law Commission issued four key recommendations for reforming local laws related to crypto use and ownership. These recommendations included creating a distinct category of personal property to protect digital assets’ unique features and conducting a common law analysis of crypto assets. Additionally, the commission proposed establishing an industry-specific panel of experts to advise courts on crypto-related legal matters.
In October 2023, the UK government said it will introduce more crypto-specific regulation during 2024, with plans to bring fiat-backed stablecoins under the oversight of the Financial Conduct Authority (FCA).
Experts from the blockchain analytics world, such as Elliptic, expect that fiat-backed stablecoins and the entities issuing them will likely fall under the umbrella of current payment regulations. This shift would arm the UK’s financial watchdog with the authority to specify the kinds of assets that are permissible for backing stablecoins.
Nevertheless, the impact of currenct strict regulations is already visible in the UK’s crypto market, with firms like Bybit and PayPal withdrawing certain services. Luno, another prominent crypto company, has restricted some clients from investing in cryptocurrencies on its platform.
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