The UK plans to implement a new regulatory framework for cryptocurrencies, stablecoins, and related services by early 2025. Tulip Siddiq, the Economic Secretary to the Treasury, made the statement during the Tokenization Summit in London on November 21, 2024. This is a huge step forward as the UK attempts to reclaim its footing in the fast-expanding digital asset sector.
A leadership change following the 2024 general election delayed the government’s initial plans to disclose the regulations by December 2024. Prime Minister Keir Starmer’s Labour administration, which entered office in July, will now oversee the creation of this regulatory framework.
The proposed framework will consolidate multiple cryptographic rules into a single structure, streamlining the supervision process. Siddiq argued that combining all parts of cryptocurrency regulation under one banner made more sense and would help address the sector’s legal difficulties. Stablecoins, currently not classified under payment services laws, will be an essential component of the new framework. This is necessary because stablecoins operate differently than standard payment methods.
In addition to stablecoins, the legislation will cover the expanding industry of crypto staking services. The government seeks to protect staking services from burdensome restrictions by avoiding designation as “collective investment schemes,” which could result in further regulatory problems.
This regulatory drive comes as the UK seeks to compete with the European Union’s MiCA legislation, which will go into effect by the end of 2024, and the US’s pro-crypto position under President Donald Trump. The UK government realizes the significance of adopting clear and effective cryptocurrency legislation in order to maintain its role as a viable hub for the developing crypto industry.
By implementing this comprehensive regulatory framework, the Labour government hopes to simplify the legal landscape, attract more crypto enterprises, and match the UK with global standards. This move is critical as the UK strives to address concerns about its regulatory environment, especially in comparison to more crypto-friendly regions in Europe and the United States.
