The United Kingdom is preparing a regulatory framework for crypto assets, expected to be unveiled early next year. This commitment was reaffirmed at the City & Financial Global’s Tokenisation Summit in London on Nov. 21 by a senior Treasury official.
Initial plans for regulation were anticipated last summer but were disrupted following a general election that brought changes in leadership. The Labour government, led by Prime Minister Keir Starmer since July 5, 2024, has now taken up the task of delivering these much-anticipated regulations.
Economic Secretary to the Treasury, Tulip Siddiq, confirmed the framework will encompass stablecoins, staking services, and cryptocurrencies. According to Siddiq:
“Doing everything in a single phase is simpler and it just makes more sense.”
Siddiq pointed out that stablecoins do not align well with current payment services regulations, necessitating dedicated legislation. Although discussions on stablecoin regulation began with a series of consultation papers in October 2023, comprehensive legislation was never expected before 2025.
In the crypto sector, there is a keen interest in how staking services will be regulated. Concerns center around whether staking will be classified as a “collective investment scheme,” a designation that could impose additional restrictions. Siddiq addressed this at the summit, stating:
“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 to Get a Grip on Crypto
The previous Conservative government had aspired to establish the UK as a global cryptocurrency hub. However, the country has gained a reputation for being a challenging regulatory environment, often attributed to the Financial Conduct Authority (FCA), an independent regulatory body.
In contrast, the European Union’s Markets in Crypto-Assets (MiCA) regulation is set to be fully implemented by the end of the year, providing regulatory clarity. Additionally, the United States, under its current administration, is viewed as pro-crypto, further highlighting the UK’s lag in attracting the crypto industry’s substantial investments.
The Conservative government had initially aimed to introduce new crypto regulations in July 2024, but political shifts delayed progress. To date, the Labour government’s main contribution to crypto legislation has been a bill proposed in September to clarify the legal status of NFTs, cryptocurrencies, and carbon credits by recognizing them as property.
With the global crypto landscape evolving rapidly, all eyes are on the UK’s ability to deliver a balanced and forward-thinking regulatory framework that meets industry expectations while ensuring consumer protection.
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