Legislators are expected to approve new regulations governing stablecoins and staking services for cryptoassets within the next half-year, as the United Kingdom prepares to face an impending general election and the pressure to deliver on specific proposals. On Monday in London, during an industry event hosted by Coinbase, Economic Secretary to the Treasury Bim Afolami stated that the government was “putting forth tremendous effort” to pass legislation.
In October, the Treasury agreed to clarify regulations pertaining to cryptocurrencies by 2024. Subsequently, numerous consultations have taken place regarding fiat-backed stablecoins and the implementation of the Financial Services and Markets Act.
We’re very clear that we want to get these things done as soon as possible. And I think over the next six months, those things are doable.
Afolami said
The United Kingdom published a proposal earlier this month that aimed to increase communication between regulators and cryptocurrency firms. In order for the nation to position itself as a “competitive location,” the 82-page paper argued that the two parties must collaborate on a regulatory framework.
As predicted by market experts, fiat-backed stablecoins will be subject to current payment regulations, thereby increasing the supervision of asset-backed digital tokens by the financial regulator.
Since its inception, Coinbase has maintained a significant role in the management of the USDC stablecoin. The San Francisco-based cryptocurrency exchange acquired a stake in Circle last summer. Consequently, the consortium that formerly oversaw USDC, Centre, was dissolved. In 2022, Circle also introduced EUROC, a stablecoin guaranteed by the Euro in a 1:1 ratio.
The United Kingdom government implemented new regulations in October to facilitate the seizure of cryptocurrency associated with illegal activities by authorities, including the ability to do so without requiring prior conviction. It represents an improvement over the previous regulations, which permitted law enforcement to release funds without reclaiming them until an individual was convicted.
In an effort to entice more digital-asset startups and investments to the United Kingdom, Prime Minister Rishi Sunak initially pledged to transform the nation into a global crypto capital in 2022. Despite claims by crypto firms that the absence of defined regulations has hampered their operations, minimal regulatory progress has been achieved since then.
