UK to Introduce New Legislation on Crypto Staking and Stablecoins by July
The United Kingdom is set to make significant strides in regulating the crypto industry with the introduction of new legislation on crypto staking and stablecoins by July this year. Economic Secretary Bim Afolami made the announcement during the Innovate Finance Global Summit in London on Monday, highlighting the government’s commitment to implementing a regulatory regime for various crypto asset activities.
The upcoming legislation will bring oversight to activities such as operating a crypto exchange and holding customers’ assets, marking a significant shift in the UK’s approach to regulating the crypto sector. This move follows the government’s plans for revised stablecoin regulation unveiled in October 2023, aimed at mitigating risks to customers and addressing stability concerns associated with stablecoins.
However, the Conservative-led government faces challenges with an upcoming election later this year, which could impact its long-term financial regulation plans in the crypto space. The Labour Party currently holds a lead in polls, with Prime Minister Rishi Sunak, a vocal supporter of cryptocurrencies, facing a 65% disapproval rating in April 2024.
The UK government has been proactive in introducing policies to regulate the crypto industry, including the passing of the Financial Services and Markets Bill in June 2023. The Payment Service Regulator has emphasized that payment systems handling stablecoins can be subject to regulation under this act.
In March, the Financial Conduct Authority announced plans to enhance market monitoring capabilities in the cryptocurrency sector to combat market abuse effectively. The UK’s latest digital asset-related regulations align with efforts by US lawmakers to push for similar stablecoin legislation, with Representatives Maxine Waters and Patrick McHenry leading legislative endeavors stateside.
The race to pass stablecoin legislation in the US before the November presidential election adds uncertainty to the regulatory landscape. As both the UK and the US move towards regulating the crypto industry, stakeholders will be closely watching developments to navigate the evolving regulatory environment.
