UK Set to Introduce Stablecoin and Staking Regulations Within Six Months
The United Kingdom is poised to implement new regulations governing stablecoins and crypto staking services in the next six months, according to Economic Secretary to the Treasury Bim Afolami. Speaking at a Coinbase-hosted event in London, Afolami stated that the government is working diligently to pass the legislation ahead of this year’s general election, Bloomberg reported.
The UK government has been making efforts to establish the country as a “global crypto hub” since Prime Minister Rishi Sunak’s pledge in 2022. However, progress on regulation has been slow, prompting calls from crypto firms for clearer rules. The UK Law Commission made several recommendations in July 2023 to reform domestic laws on crypto use and ownership, including creating a new category of personal property for digital assets.
In October 2023, the government announced plans to introduce more crypto-specific regulation in 2024, with the regulation of fiat-backed stablecoins falling under the purview of the Financial Conduct Authority (FCA). The UK’s move to regulate stablecoins and staking comes as part of broader efforts to enhance oversight and consumer protection in the crypto sector.
Stablecoins, which are digital tokens backed by fiat currency, have garnered increased attention from regulators globally due to their potential impact on financial stability. The UK government aims to categorize staking, a mechanism for earning rewards by supporting blockchain operations, in a way that avoids classification as a collective investment scheme.
While the UK government’s efforts to regulate stablecoins and staking are a step in the right direction, broader regulations for crypto exchanges and industry services remain uncertain. Despite Prime Minister Sunak’s pledge to establish the UK as a leading crypto hub, regulatory progress has been minimal, with industry players citing the absence of definitive rules as a significant operational hurdle.
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