The United Kingdom is set to implement new legislation to regulate stablecoins and crypto staking within the next six months. Speaking at a crypto event hosted by Coinbase in London on February 19, Bim Afolami, the Economic Secretary to the Treasury, stated that the government is working diligently to ensure the passage of this legislation before the upcoming general election. Although Afolami did not provide specific details about the regulations, he emphasized the extensive ongoing efforts and did not want to make any commitments at the moment.
In 2022, UK Prime Minister Rishi Sunak made a commitment to establish the country as a “global crypto hub,” recognizing the importance of allowing crypto firms to invest, innovate, and expand within the United Kingdom. However, since then, there has been limited progress in implementing regulations, despite numerous calls from crypto firms operating in the UK for clearer rules.
On July 3, 2023, the UK Law Commission issued four significant recommendations to reform domestic laws regarding crypto usage and ownership. One of these recommendations called for the creation of a new distinct category of personal property to accommodate and protect the unique attributes of digital assets. Additionally, the commission proposed a common law analysis of crypto assets and the establishment of an industry-specific panel consisting of technical experts, academics, and legal practitioners to provide guidance to courts on crypto-related legal matters.
On October 30, 2023, the UK government announced its intention to introduce more specific regulations for cryptocurrencies in 2024. It also plans to bring the regulation of fiat-backed stablecoins under the oversight of the Financial Conduct Authority (FCA).
As the UK prepares for its general election, anticipated to take place in the second half of 2024, the Labour Party, which is expected to be less supportive of cryptocurrencies, is currently leading in the early-stage polls.