London, UK, Monday, February 26, 2024 – The UK government is accelerating its efforts to bring regulatory clarity to the cryptocurrency landscape, announcing plans for new laws governing stablecoin and staking services within the next six months. 1
This move comes amid growing pressure to deliver concrete proposals before the upcoming general election, expected to occur in December 2024.
Economic Secretary to the Treasury, Bim Afolami, emphasized the need for clear rules to ensure a “healthy and innovative” crypto market. He stated, “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.” 2
The proposed regulations will focus on two key areas: stablecoins and cryptocurrencies, which are designed to maintain a stable value and are often pegged to traditional assets like the US dollar.
The government aims to mitigate risks associated with issuance, redemption, and reserve management.
Staking refers to holding cryptocurrency tokens to earn rewards or participate in network validation.
The government seeks to clarify the regulatory treatment of staking services offered by intermediaries and establish necessary consumer protections.
The initiative follows consultations launched by the Bank of England and the Financial Conduct Authority (FCA) in November 2023, seeking industry feedback on potential regulatory frameworks for stablecoins.
While specific details remain under wraps, the government’s intention suggests a potential bill or regulatory framework could be introduced before the end of 2024.
Analysts opined that following the European Parliament Committee approving the legal framework for the markets in crypto-assets and the White House publishing its comprehensive framework for digital assets, seeing the UK follow right behind was a positive sign for the crypto industry.
Future financial services regulatory regime for cryptoassets: In response to the consultation and call for evidence, the UK Government’s document on digital assets can be seen here.
Another Government document on crypto asset laws can be seen here.
- Bloomberg: https://www.bloomberg.com/news/articles/2024-02-19/uk-s-afolami-says-expects-rules-on-stablecoins-crypto-staking-within-six-months[↩]
- dailyhodl: https://dailyhodl.com/2024/02/21/uk-pushing-to-regulate-stablecoins-and-crypto-staking-within-six-months-says-treasury-minister-report//[↩]
