The British government plans to introduce legislation to regulate stablecoins and crypto staking.
This move comes as President-elect Donald Trump lays out his plans to make the United States a global crypto hub, creating fresh competition for the UK to retain and attract digital asset businesses.
According to a Bloomberg report, the UK Treasury is drafting two legislative measures focused on stablecoins and an exemption requested by crypto providers to keep staking services separate from existing financial regulations.
The stablecoin laws will allow the Financial Conduct Authority (FCA) to consult with the industry on rule-making. On the other hand, staking will be reclassified to avoid being treated as a collective investment scheme, which would impose additional scrutiny.
The timing of these new ordinances coincides with Donald Trump’s recent election victory, which has boosted confidence in the American crypto market.
Trump has made bold promises to turn the U.S. into the world’s leading crypto hub, pledging to fire SEC Chair Gary Gensler, create a Bitcoin reserve, and make the U.S. the central location for Bitcoin mining. His administration is reportedly already consulting with industry leaders to shape these new policies.
With the U.S. moving quickly on crypto guidelines, British policymakers are concerned that startups in the sector may seek clearer and more favorable regulatory environments in other jurisdictions.
Speaking to the business publication, Laura Navaratnam, UK policy lead at the Crypto Council for Innovation, highlighted this worry:
She added that the country is admittedly more behind than the Treasury and the regulators would’ve ideally wanted.
Sources cited by Bloomberg indicate that the FCA is expected to outline a timeline for its approach to stablecoin regulation early next year. The authority’s strategy will reportedly involve an initial consultation on stablecoins, followed by a phased plan to address other areas of the crypto market.
The government will also provide an update on developments in the digital securities sandbox, a real-time blockchain testing environment managed by the FCA and the Bank of England.
Stablecoin regulation was initially expected to pass under former Prime Minister Rishi Sunak’s administration over the summer as part of Sunak’s plan to attract digital asset businesses to the country. However, they were delayed following a general election that saw Labour’s Keir Starmer take power.
Last year, the UK Treasury also announced its intention to provide guidance on stablecoins and other specific areas of cryptocurrency in 2024. This followed a government consultation on fiat-backed digital assets and the passing of the Financial Services and Markets Act in June 2023.
The post UK to Introduce Legislation on Stablecoins, Crypto Staking: Report appeared first on CryptoPotato.
This move comes as President-elect Donald Trump lays out his plans to make the United States a global crypto hub, creating fresh competition for the UK to retain and attract digital asset businesses.
Stablecoin and Staking Legislation
According to a Bloomberg report, the UK Treasury is drafting two legislative measures focused on stablecoins and an exemption requested by crypto providers to keep staking services separate from existing financial regulations.
The stablecoin laws will allow the Financial Conduct Authority (FCA) to consult with the industry on rule-making. On the other hand, staking will be reclassified to avoid being treated as a collective investment scheme, which would impose additional scrutiny.
The timing of these new ordinances coincides with Donald Trump’s recent election victory, which has boosted confidence in the American crypto market.
Trump has made bold promises to turn the U.S. into the world’s leading crypto hub, pledging to fire SEC Chair Gary Gensler, create a Bitcoin reserve, and make the U.S. the central location for Bitcoin mining. His administration is reportedly already consulting with industry leaders to shape these new policies.
With the U.S. moving quickly on crypto guidelines, British policymakers are concerned that startups in the sector may seek clearer and more favorable regulatory environments in other jurisdictions.
Speaking to the business publication, Laura Navaratnam, UK policy lead at the Crypto Council for Innovation, highlighted this worry:
She added that the country is admittedly more behind than the Treasury and the regulators would’ve ideally wanted.
Implementation Roadmap and Delays
Sources cited by Bloomberg indicate that the FCA is expected to outline a timeline for its approach to stablecoin regulation early next year. The authority’s strategy will reportedly involve an initial consultation on stablecoins, followed by a phased plan to address other areas of the crypto market.
The government will also provide an update on developments in the digital securities sandbox, a real-time blockchain testing environment managed by the FCA and the Bank of England.
Stablecoin regulation was initially expected to pass under former Prime Minister Rishi Sunak’s administration over the summer as part of Sunak’s plan to attract digital asset businesses to the country. However, they were delayed following a general election that saw Labour’s Keir Starmer take power.
Last year, the UK Treasury also announced its intention to provide guidance on stablecoins and other specific areas of cryptocurrency in 2024. This followed a government consultation on fiat-backed digital assets and the passing of the Financial Services and Markets Act in June 2023.
The post UK to Introduce Legislation on Stablecoins, Crypto Staking: Report appeared first on CryptoPotato.
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