The United Kingdom is set to introduce new legislation governing stablecoins and various cryptocurrency activities, including staking, trading, and custody, by June or July 2024.
The forthcoming regulations mark a significant milestone in the country’s efforts to create a regulated and supervised environment for the digital asset industry, ensuring consumer protection and market integrity.
TLDR
- The U.K. government plans to introduce new legislation for stablecoins and various crypto activities, including staking, trading, and custody, by June or July 2024.
- The forthcoming regulations will bring digital assets under regulatory oversight for the first time, following the approval of the Financial Services and Markets Act in June 2023.
- The government aims to create a regulated and supervised environment for the crypto industry, ensuring consumer protection and market integrity.
- The U.K. Financial Conduct Authority (FCA) will launch a consultation on an authorization regime for digital asset companies, while the government plans to establish equivalence measures for overseas firms.
- Despite the government’s efforts to create a crypto-friendly environment, the U.K. industry has faced challenges, including delays and inadequate feedback from the FCA, as well as restrictions on digital asset advertising.
U.K. Economic Secretary Bim Afolami reaffirmed the government’s commitment to fast-tracking cryptocurrency-related issues during the Innovate Finance Global Summit.
He emphasized that legislation is being developed quickly to finalize proposals for the new regulatory regime, with the aim of bringing a range of digital asset activities under the regulatory umbrella within the next six months.
The new legislation follows the approval of the Financial Services and Markets Act in June 2023, which paved the way for cryptocurrencies to be treated as a regulated financial activity in the U.K.
Once the legislation comes into effect, activities such as operating exchanges and providing custodial services will fall within the regulatory perimeter for the first time.
In addition to the forthcoming legislation, the U.K. Financial Conduct Authority (FCA) is set to launch a consultation on an authorization regime for digital asset companies.
The government also plans to establish equivalence measures for overseas firms, fostering a level playing field for the industry.
The U.K. government’s approach to digital asset regulation has been phased, with an initial focus on fiat-backed stablecoins, followed by addressing other areas such as algorithmic stablecoins, lending, and trading.
The government recognizes the need for greater clarity and aims to provide a regulatory framework that balances innovation and investor protection.
However, despite the government’s efforts to create a crypto-friendly environment, the U.K. industry has faced challenges. Digital asset firms, including exchanges, have voiced concerns over delays and inadequate feedback from the FCA.
Recently introduced rules restricting digital asset advertising have also led to some high-profile firms scaling back or ceasing operations in the U.K. market.
The FCA’s vigilance in tackling suspected illegal crypto promotions is evident, with over 450 warnings issued in three months in February 2024.
Source: https://blockonomi.com/u-k-to-introduce-stablecoin-and-crypto-legislation-by-mid-2024/