The United Kingdom government hopes to bring new legislation regulating stablecoins and cryptocurrency staking services within six months.
Speaking at a Coinbase-hosted industry event in London on Feb. 19, Economic Secretary to the Treasury Bim Afolami revealed that the government is “pushing very hard” to legislate these new regulations ahead of this year’s general election, Bloomberg reported.
“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.”
The U.K. government’s push for crypto regulation might be influenced by the forthcoming election and the desire to attain political advantage.
U.K. Prime Minister Rishi Sunak in 2022 vowed to turn the country into a global crypto hub, emphasizing the need to ensure crypto firms can “invest, innovate and scale up” in the UK. However, little regulatory progress has been made in the country since then, with crypto players citing the lack of concise rules as a huge operational barrier and a potential reason to exit the jurisdiction.
It’s worth noting that Afolami declined to give a timeline for comprehensive crypto regulation beyond stablecoins and staking, pointing to the vast scope of ongoing legislative efforts. “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,” he postulated.
The UK Treasury pledged in October 2023 to clarify rules in the crypto space by 2024. Since then, it’s had several consultations on fiat-pegged stablecoins and the implementation of the Financial Services and Markets Act 2023.
Pundits have been forecasting that fiat-backed stablecoins will fall under already-existing payment regulations, bringing asset-backed digital tokens under the UK’s realm of financial regulations rather than existing as a standalone regulatory regime.
Last October, the UK government enacted a new law to make it easier for law enforcement agencies and local courts to confiscate and freeze crypto assets tied to criminal activities without a conviction. It’s an advancement from the laws that previously permitted authorities to free the tainted crypto but not seize it until the criminal had been apprehended and convicted.
