In a statement made on Monday at the Innovate Finance Global Summit in London, Economic Secretary Bim Afolami stated that the UK will be enacting new stablecoin and crypto staking laws by July.
TakeAway Points:
- Bim Afolami, Innovate Finance Global Summit in London, Economic Secretary, stated in a post that the UK will be enacting new stablecoin and crypto staking laws by July.
- News of the nearly finalized legislation comes after the UK government released its plans for updated stablecoin regulation in October 2023.
- According to the report, this initiative aims to reduce the possibility of harm to customers and to lessen the risks associated with such stablecoins in terms of prudential, financial stability, and behaviour.
UK Stablecoin and Crypto Staking Legislation
“We are now working at a 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 stated.
News of the nearly finalized legislation comes after the UK government released its plans for updated stablecoin regulation in October 2023. The goal is “to minimize the potential for customer harm and mitigate the conduct, prudential, and financial stability risks arising from those stablecoins.”
According to the report, an election is anticipated later this year, which might derail the government’s plans for long-term financial regulation in the cryptocurrency space. The UK’s Labour Party continues to hold a commanding lead over the ruling Conservative Party, with April 2024 polls indicating a 65% disapproval rating of Prime Minister Rishi Sunak.
Sunak, a former Goldman Sachs analyst and ardent cryptocurrency supporter, has long dreamed of turning the UK into a global centre for the cryptocurrency space. In February 2024, Afolami had previously warned about his government’s intention to introduce stablecoin legislation “as soon as possible.”
UK Implements Significant Crypto Regulatory Measures
The UK government has been swift in introducing a number of policies on the crypto industry in recent years, passing the Financial Services and Markets Bill (FMSB) in June 2023.
According to a statement by the UK’s Payment Service Regulator (PSR), an independent subsidiary of the country’s Financial Conduct Authority (FCA), the act makes “absolutely clear that a payment system handling stablecoins can be subject to regulation by the PSR.”
However, in March, the FCA revealed its plans to combat market abuse in the cryptocurrency sector by heightening its market monitoring capabilities and developing advanced analytics systems.
US Lawmakers Pursue Separate Stablecoin Legislation
Meanwhile, legislators in the US are pushing for stablecoin laws such as the one that the UK government recently passed pertaining to digital assets.
Leading the way in stateside legislation are Representatives Maxine Waters (D-CA) and Patrick McHenry (R-NC). According to reports, in an attempt to win over both parties, they might try to attach stablecoin issues to a bigger, largely unrelated law.
Their ability to successfully pass legislation prior to the US presidential election in November is doubtful.
