UK Govt to Launch Crypto and Stablecoin Regulations in the Next 6 Months

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The United Kingdom is gearing up for a major regulatory development in the cryptocurrency space, with plans to introduce comprehensive legislation covering stablecoins and staking services within the next six months. 

The upcoming Crypto and Stablecoin Regulations 2024 aim to bring clarity to stablecoins and staking services. Staking, which is the process where investors lock up their tokens to support a blockchain, is expected to receive a new classification. 

Tom Duff Gordon, Vice-President for International Policy at Coinbase, mentioned, “Staking will be reclassified to avoid being considered a collective investment.”

Economic Secretary to the Treasury, Bim Afolami, affirmed the government’s commitment to swift action during an industry event hosted by Coinbase in London. Afolami 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.” 

This commitment of the Treasury is backed by the initial promise in October 2023 to provide more clarity on crypto-related matters in 2024. Bim Afolami’s election as the new Economic Secretary to the Treasury in 2023 voiced speculations since he was named as the ‘crypto tsar’ by the ex-Secretary, Andrew Griffith. However, Afolami’s proactive stance on crypto, including his meeting with Coinbase back in 2022, and now the new regulation within almost a year of his election, strengthens his position as a crypto supporter. 

The move comes amid increasing pressure to address regulatory uncertainties in the crypto space. The UK government’s push for stablecoin and staking regulations is seen as a significant step towards creating a more transparent and secure crypto environment. 

While stablecoins are expected to fall under existing payment laws, providing regulators control over asset backing, staking services will see a new classification.

Despite the focus on stablecoins and staking, broader proposals to regulate crypto exchanges and other industry providers are still pending. Afolami was unable to provide a timeline for this, stating, “There’s just a huge amount going on, so I don’t want to commit to that now.”

In November 2023, the Bank of England unveiled stablecoin regulations set to take effect in 2024. These regulations will focus on regulating stablecoins backed by the British pound. The framework emphasizes collaboration between the Bank of England and the Financial Conduct Authority (FCA), with the BOE overseeing systemic stablecoins and the FCA governing the broader crypto market.