UK PLANS STABLECOIN AND STAKING REGULATIONS IN 6 MONTHS

The British government is accelerating the process of implementing new regulations for stablecoins and crypto asset staking services, aiming to have these rules ratified by lawmakers within the next six months, according to Bloomberg.

This move follows the Treasury’s commitment in October to provide increased clarity on specific areas of cryptocurrency regulation by 2024, following an earlier consultation on fiat-backed stablecoins and the passing of the Financial Services and Markets Act the previous summer.

Economic Secretary to the Treasury, Bim Afolami, confirmed this dedication during an industry event hosted by Coinbase in London, expressing confidence in achieving tangible progress within the specified timeframe. Market observers anticipate that fiat-backed stablecoins and their issuers will fall under regulation under existing payment laws, empowering the UK’s financial regulator to determine which asset types can back stablecoins.

Additionally, staking services, crucial to blockchain operations, will receive a new classification to address concerns about categorization as collective investments. Tom Duff Gordon, vice president for international policy at Coinbase, stressed the significance of clear regulatory frameworks for promoting innovation while safeguarding investor interests.

However, broader proposals to subject crypto exchanges and industry providers to existing financial services regulations remain unresolved. Afolami refrained from providing a definitive timeline, citing the complexity of ongoing developments within the sector.

Prime Minister Rishi Sunak previously pledged to position the UK as a leading center for crypto businesses and investments, but progress in regulatory measures has been slow. By October 2023, the UK government outlined plans to regulate the crypto sector under financial laws, prompting companies like Revolut and Bitfinex to halt their services in the UK. To comply with FCA regulations, Coinbase began requiring UK users to fill out risk-acknowledgment forms, while Bittrex Global announced plans to wind down operations in November due to regulatory challenges and market share decline.

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