By
Chimamanda U. Martha
April 29th, 2024
The planned introduction of the crypto and stablecoin rules in July is part of the country’s efforts to become a global crypto hub.
The government of the United Kingdom (UK) is planning to roll out new legislation to regulate crypto and stablecoins issuance and usage in the British nation. According to a CoinDesk report on Monday, the UK’s Economic Secretary, Bim Afolami, disclosed plans for the new crypto regulations at the Global Summit on Innovative Finance on April 15, 2024. Speaking at the event, Afolami mentioned that the regulations are scheduled to be introduced in a few months between June and July this year.
UK to Regulate Trading and Staking Cryptocurrencies
The British minister said the law would cover different areas of the emerging economy, including trading digital assets on exchanges, operating as a virtual asset service provider (VASP), and crypto custodianship.
“We are now working at pace to deliver the legislation to put our final proposals for our regime in place. Once it goes live, a whole host of crypto asset activities, including operating an exchange, taking custody of customers’ assets and other things, will come within the regulatory perimeter for the first time,” Afolami said at the summit.
The law will also extend to other activities in the industry, such as staking, which allows users to earn passive income from their digital asset holdings.
In February 2024, the economic secretary hinted at a Coinbase event in London that the UK plans to wrap up the implementation of the rule within six months. At the time, Afolami failed to provide details of the upcoming legislation.
UK’s Crypto Ambitions and Regulatory Developments
The planned introduction of the crypto and stablecoin rules in July is part of the UK’s efforts to become a global crypto hub.
Earlier in 2022, British Prime Minister Rishi Sunak unveiled a plan to turn the UK into a leading financial center that supports crypto companies in their operations, investments, innovation, and scalability.
In July 2023, the UK’s Law Commission introduced four major recommendations to overhaul domestic crypto laws. The move set the stage for the country to recognize stablecoins and other cryptocurrencies as regulated financial activities.
That same year, in February, the UK’s Financial Conduct Authority (FCA) and the Bank of England (BoE) embarked on consultations to further advance the government’s agenda of becoming a global financial centre.
The consultation aimed to establish a regulatory framework for stablecoins. The BoE said it would be in charge of supervising large stablecoin providers that could impact the financial system, while the FCA would be responsible for regulating the entire crypto space.
Despite these promising developments, the UK’s upcoming general election has introduced an element of uncertainty in crypto regulations in the country. Should the Conservatives lose power, their crypto-related plans might face delays or revisions, given that the Labour Party is currently favored to win the election.