UK To Introduce New Rules on Crypto Staking and Stablecoins In Six Months

Recent reports suggest that over the next six months, UK lawmakers will introduce new rules for crypto-staking services as well as governing stablecoins. Also, there’s growing pressure from the cabinet to submit a proposal before the next general elections.

UK Pushing Hard for Crypto Staking Regulations

At an industry event hosted by Coinbase in London, Economic Secretary to the Treasury Bim Afolami expressed the government’s strong commitment to advancing legislation. Afolami emphasized the government’s determined efforts to push forward with legislative initiatives. Speaking on the development, Afolami said:

“We’re very clear that we want to get these things done as soon as possible. And I think over the next six months, those things are doable”.

Last year, the Treasury made a promise to offer clearer guidelines on certain aspects of crypto by the year 2024. This commitment came after an initial consultation on fiat-backed stablecoins. Additionally, it coincided with the passing of the comprehensive Financial Services and Markets Act in the previous summer.

UK’s Crypto Regulatory Development At Slow Speed

According to market analysts like Elliptic, there’s an anticipation that fiat-backed stablecoins and their issuers will come under regulation through existing payment laws. This regulatory approach could empower the UK’s financial overseers to determine the types of assets permissible for supporting stablecoins.

Regarding crypto staking, which involves investors locking up their tokens to support blockchain operations and earning a modest yield, Tom Duff Gordon, vice president for international policy at Coinbase, mentioned in an interview that it’s anticipated to receive a fresh classification to avoid being labeled as a collective investment.

Also, the broader proposals to subject crypto exchanges and other industry players to existing financial services regulations, are still pending. When asked about the potential timeline for such guidance to transition into law this year, Bim Afolami refrained from providing a definitive answer.

“Short answer is, I don’t know,” said Afolami. “There’s just a huge amount going on, so I don’t want to commit to that now.”

Prime Minister Rishi Sunak had initially vowed to position the UK as a global crypto hub back in 2022, aiming to draw more digital asset businesses and investment to the nation. However, there has been relatively little regulatory advancement since then, with crypto firms expressing difficulties in operating due to the lack of clear rules.