Key Takeaways
As per media reports, the framework will address cryptocurrency, stablecoins, and staking services
The proposed regulations were delayed following a general election earlier this year
The United Kingdom is set to release a draft regulatory framework for cryptocurrency in early 2024, Economic Secretary to the Treasury Tulip Siddiq announced at the Tokenisation Summit in London on November 21. As per media reports, the framework will address cryptocurrency, stablecoins, and staking services as part of a broader effort to provide clarity to the digital assets sector.
The proposed regulations were delayed following a general election earlier this year, which brought the Labour government into power. Under the previous Conservative government, the UK had aimed to establish itself as a global hub for cryptocurrency.
Siddiq stated that consolidating the framework into a single phase would streamline the process. She emphasized that stablecoins, which are pegged to assets such as fiat currencies, are not well-suited for regulation under the UK’s current payment services rules and require a tailored approach. Staking services, where investors lock tokens in exchange for yields, will also have legal uncertainties addressed.
“For me, it doesn’t make sense for staking services to have this treatment,” Siddiq said, noting that the government plans to remove ambiguities in this area.
The Labour government has already introduced preliminary measures related to digital assets. In September, a bill was proposed to classify crypto assets, such as Bitcoin and non-fungible tokens (NFTs), as personal property, providing additional legal protections.
The UK’s move comes as other jurisdictions advance their regulatory efforts. The European Union’s Markets in Crypto-Assets (MiCA) regulation is set to take full effect by the end of this year, establishing clear rules on stablecoins, audits, and disclosure requirements. For market players, MiCA regulation introduces stringent rules governing various facets of the digital asset industry, including crypto firms, fund custody, and client verification processes.
