The UK’s Labour government is gearing up to introduce new regulations for cryptocurrencies, stablecoins, and various crypto assets, aligning itself with the transformation of crypto policies seen in Europe and the U.S. At the Tokenisation Summit in London on November 21, a Treasury spokesperson revealed that a detailed regulatory framework for crypto assets is expected to be ready by early next year.
Regulatory Momentum Under New Leadership
Initial plans for these regulations were set in motion last summer, but they were derailed by political changes following the general election, which led to the departure of Prime Minister Rishi Sunak’s Conservative government.Now, with Keir Starmer’s Labour Party in power since July 5, 2024, there’s renewed momentum to move forward. Economic Secretary to the Treasury, Tulip Siddiq, stated that the impending regulations will encompass not just stablecoins and staking services, but the entire spectrum of cryptocurrency.
She made a strong case for a cohesive regulatory approach, arguing against a piecemeal strategy.
Currently, the existing regulatory framework for payment services is unable to keep pace with the varied applications of stablecoins.
While discussions have already started on stablecoin legislation, these new rules won’t likely come into effect until 2025.
Potential Exemptions and Current Climate
The crypto sector is particularly optimistic about a potential exemption for staking services from being categorized as a “collective investment scheme,” which often carries cumbersome restrictions.Siddiq expressed her belief that subjecting staking services to such classifications is impractical, and the government aims to clarify any legal ambiguities surrounding these services. The previous Conservative government had ambitious designs for the UK to become a prominent center for cryptocurrency, but the country’s regulatory climate has been perceived as daunting, largely due to the independent actions of the Financial Conduct Authority.
A Look to Europe and the U.S.
Meanwhile, the European Union is set to fully implement its Markets in Crypto-Assets (MiCA) regulation by year’s end, providing much-needed clarity for businesses operating within Europe’s borders.As the continent strengthens its regulatory framework and the U.S. maintains a welcoming stance towards crypto innovations, there’s a growing concern that the UK might lose its allure for the thriving crypto industry. So far, the Labour government has introduced a single regulatory measure: a bill from September that seeks to clarify the legal status of non-fungible tokens (NFTs), cryptocurrency, and carbon credits by defining them as property.
Source: Cointelegraph.com
