According to a recent industry event, the UK government is pushing to enact legislation within the next 6 months to regulate stablecoins and staking. The Economic Secretary to the Treasury emphasized the urgency to have these rules approved by mid-2024.
The UK has taken a phased approach by first targeting stablecoins pegged to fiat currencies that are used for payments. This allows them to address potential risks to the mainstream financial system while developing a broader framework for the crypto asset sector separately.
Under the proposals, stablecoins could face regulations around both payments and issuance/storage based in the UK. Three regulatory bodies would jointly oversee certain fiat-backed stablecoins. These suggestions follow a consultation earlier this year regarding upcoming crypto rules.
Reactions from the crypto industry have been mixed. Some see the alignment with the UK’s vision to be a crypto hub as positive, while others remain cautiously optimistic. A Treasury Minister previously voiced support for the stablecoin framework.
The new regulations may exempt staking from being considered a collective investment according to a prediction. But the details remain to be finalized within the tight 6-month timeframe the government has outlined.
Overall, the UK is progressing quickly to enact stablecoin and staking legislation amidst the broader complexity of regulating cryptocurrencies. The urgency highlights a priority to address potential risks before expanding the regulatory scope.
