The UK is set to introduce new crypto staking and stablecoin legislation by July of this year, Economic Secretary Bim Afolami announced at the Innovate Finance Global Summit in London on Monday.
UK Stablecoin And Crypto Staking Legislation On The Way, Bim Afolami Says
“We are now working at a pace to deliver the legislation to put our final proposals for our regime in place,” Afolami stated. “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.”
🇬🇧🚨🇬🇧🚨🇬🇧 𝗟𝗢𝗡𝗗𝗢𝗡 𝗜𝗦 𝗥𝗘𝗔𝗗𝗬 🇬🇧🚨🇬🇧🚨🇬🇧
👤 @BimAfolami, MP and Economic Secretary to HM Treasury outlines that legislation is being developed to regulate #stablecoins and #staking, with plans to finalize proposals by their summer recess (🗓 July 24) 💥
Upon… pic.twitter.com/GAkBLWAbn4
— Subjective Views (@subjectiveviews) April 15, 2024
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.”
However, the current Conservative-led government is expected to face an election later this year, which could potentially thwart its plans for long-term financial regulation in the crypto sector.
The UK’s Labour Party is maintaining a solid lead over the reigning conservative party, with April 2024 polls showing a 65% disapproval rating of Prime Minister Rishi Sunak. Sunak, an ardent cryptocurrency supporter and former Goldman Sachs analyst, has long envisioned making the UK a hub for the crypto industry.
At a crypto event in February 2024, Afolami previously warned about his government’s intent to put forward stablecoin legislation “as soon as possible.”
UK Takes Decisive Steps in Crypto Regulation
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.”
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 Seek Their Own Stablecoin Bill
The UK government’s latest digital asset-related regulation comes as US lawmakers push for similar stablecoin legislation themselves.
👀 Leading Lawmakers From House Financial Services Committee Meet With Chuck Schumer To Discuss Stablecoin Bill: Punchbowl News#CryptoNewshttps://t.co/9OWIU4C690
— Cryptonews.com (@cryptonews) April 13, 2024
Representatives Maxine Waters (D-CA) and Patrick McHenry (R-NC) are spearheading stateside legislative efforts. Reports indicate they may push to tack stablecoin concerns onto a larger, relatively unrelated bill in hopes of securing bipartisan support.
It is uncertain whether they will be able to pass legislation successfully before the November US presidential election.