A Treasury official stated that a draft regulatory framework for crypto assets would be prepared in the United Kingdom by early next year.
The Conservative administration of Prime Minister Rishi Sunak, as well as specific regulations that were anticipated last summer, were ultimately defeated by a general election. Keir Starmer’s Labour government, which assumed office on July 5, 2024, will unveil the regulations.
Comprehensive framework
The regulations will encompass stablecoins and staking services, in addition to cryptocurrency itself, according to Tulip Siddiq, the Economic Secretary to the Treasury, per Bloomberg. Siddiq stated:
“Doing everything in a single phase is simpler and it just makes more sense.”
Siddiq stated that Stablecoin’s use cases do not render it a suitable candidate for the current regulation of payment services. Stablecoin legislation has been in the works since publishing a suite of discussion papers in October 2023, but it was only anticipated to be completed in 2025.
The crypto industry aspires to defy the classification of staking as a “collective investment scheme,” which would impose supplementary constraints. Siddiq stated during the summit:
“For me, it doesn’t make sense for staking services to have this treatment. The government intends to proceed with removing this legal uncertainty accordingly.”
The UK Needs a comprehensive understanding of crypto
The former Conservative government aspired to establish the United Kingdom as a cryptocurrency center; however, the regulatory environment has been perceived as challenging to navigate. The Financial Conduct Authority, a regulator that is independent of the government, is frequently held accountable for this perception.
Meanwhile, the European Union’s Markets in Crypto-Assets (MiCA) regulation will be fully implemented by the end of the year. The UK is becoming less appealing to the multibillion-dollar crypto industry due to the continent’s regulatory certainty and the United States Trump administration’s pro-crypto stance.
The former government had pledged to implement new crypto regulations in July; however, this was not feasible.
The Labour government’s sole attempt at crypto regulation thus far has been the introduction of a measure in September that aims to clarify the legal status of non-fungible tokens (NFTs), cryptocurrency, and carbon credits by declaring them property.
