The United Kingdom has set its sights on enacting new legislation to regulate stablecoins and crypto staking within the next six months. Economic Secretary to the Treasury, Bim Afolami, revealed this during a crypto event hosted by Coinbase in London on February 19. The government is determined to pass the new laws before the upcoming general election later this year. However, Afolami refrained from providing specific details about the regulations, citing the complexity of the situation.
In 2022, Prime Minister Rishi Sunak made a commitment to position the UK as a “global crypto hub” and emphasized the importance of enabling crypto companies to invest, innovate, and expand within the country. Despite this, little progress has been made in terms of regulatory measures, despite calls from crypto firms operating in the UK for clearer guidelines.
On July 3, 2023, the UK Law Commission published four major recommendations to reform domestic laws concerning the use and ownership of cryptocurrencies. These recommendations included the creation of a new category of personal property to accommodate digital assets’ unique characteristics and ensure their protection. The Commission also urged the government to conduct a common law analysis of crypto assets and establish a panel of experts from the industry to advise courts on legal matters related to cryptocurrencies.
On October 30, 2023, the UK government announced its intention to introduce further regulations specific to cryptocurrencies in 2024. Additionally, it plans to bring the regulation of fiat-backed stablecoins under the supervision of the Financial Conduct Authority (FCA).
As the UK prepares for the general election, expected to take place in the second half of 2024, the Labour Party, which is leading in early-stage polls, is projected to be less supportive of cryptocurrencies.