The U.K. government has announced plans to introduce new legislation targeted at regulating stablecoins and various crypto-related activities including staking, exchange, and custody services. Ths move was confirmed by Economic Secretary Bim Afolami during his address at the Innovate Finance Global Summit. The legislation aims to bring a wide range of cryptocurrency operations under regulatory oversight for the first time.
Bim Afolami, the Economic Secretary, spearheads this initiative, emphasizing the government’s commitment to establishing a comprehensive regulatory framework for the cryptocurrency sector. The impending regulations will involve oversight from the Financial Conduct Authority (FCA) and the Bank of England (BoE), which have been involved in preparatory consultations since February of the previous year.
The proposed legislation is expected to be introduced by June or July of this year, as indicated by Afolami. This timeline is crucial as it coincides with the U.K.’s political calendar, which includes an upcoming election where the current government could face significant changes.
The legislation will apply across the United Kingdom, aligning with the country’s ambition to position itself as a global hub for cryptocurrency. This move builds on the foundational financial markets bill passed in 2023, which already began the process of integrating stablecoins and broader crypto activities into the regulated financial sector.
The initiative stems from the government’s strategic vision to harness the potential of digital currencies and ensure a secure, regulated environment for cryptocurrency investors and service providers. This regulatory push is part of a broader effort to maintain the U.K.’s financial stability while fostering innovation in the emerging crypto market.
The upcoming legislation will detail the roles of the FCA and BoE in regulating the sector. The BoE will focus on overseeing stablecoin providers that might impact the financial system, while the FCA will regulate a wider array of crypto activities. This dual approach aims to address both macroeconomic concerns and consumer protection issues within the cryptocurrency domain.
