A draft regulatory framework for crypto assets will be ready in the United Kingdom early next year, a Treasury official promised at City & Financial Global’s Tokenisation Summit in London on Nov. 21.
Some regulations were expected last summer, but a general election overturned those plans along with the Conservative government of Prime Minister Rishi Sunak. Now, Keir Starmer’s Labour government, which took office on July 5, 2024, will present the regulations.
A comprehensive framework
Economic Secretary to the Treasury Tulip Siddiq said the regulations would cover stablecoins and staking services, as well as cryptocurrency itself, Bloomberg reports. Siddiq said:
“Doing everything in a single phase is simpler and it just makes more sense.”
Stablecoin’s use cases do not make it a good fit for existing payment services regulation, Siddiq said. Stablecoin legislation has been in the works since the release of a suite of discussion papers in October 2023 but was never expected earlier than 2025.
The crypto industry hopes that staking can escape being designated as a “collective investment scheme,” as that brings with it additional restrictions. Siddiq said at the summit:
“For me, it doesn’t make sense for staking services to have this treatment. The government intends to proceed with removing this legal uncertainty accordingly.”
The UK needs to get a grip on crypto
The former Conservative government expressed the ambition to make the United Kingdom a cryptocurrency hub, but so far the country has often been seen as a challenging regulatory environment. Blame for that perception is often placed on the Financial Conduct Authority, which is a regulator independent of the government.
Source: Tulip Siddiq
Meanwhile, the European Union’s Markets in Crypto-Assets (MiCA) regulation will come into full force by the end of the year. With the continent offering regulatory certainty and the United States’ Trump administration being viewed as pro-crypto, the UK is looking less and less attractive to the multibillion-dollar crypto industry.
The former government had promised new crypto regulations in July, but that was not possible. So far, the Labour government’s only attempt at crypto regulation has been a bill proposed in September to clarify the legal status of non-fungible tokens (NFTs), cryptocurrency and carbon credits by declaring them property.
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