- The United Kingdom is working towards establishing regulatory standards for the crypto industry.
- The regulatory framework, previously proposed, will focus on two key sectors.
- The Bank of England has proposed regulatory requirements for stablecoin issues in the region.
Over the past year, the United Kingdom government has expressed aspirations to establish a functioning regulatory framework for its domestic crypto industry, targeting the supply and use of fiat-backed stablecoins and other crypto-related services.
Following months of schemings and proposals, the government is now gearing towards establishing the regulations.
UK Stablecoins and Crypto Regulations
On Tuesday, February 20, Bloomberg reported that the United Kingdom is marching towards implementing legislation focused on stablecoin and crypto staking services.
While there is no specific timeline for the implementation, the report stated that the legislation is expected to come into effect before the end of the year, citing the Economic Secretary to the Treasury, Bim Afolami.
“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,” Afolami reportedly stated.The implementation will target UK-based business models focused on payments-related activities and innovation within payments.
Secretary Afolami’s statements follow the proposal of stablecoin-focused regulatory standards in the past year, which outlined specific requirements for the use of stablecoins.
UK’s Stablecoin Regulatory Requirements
In November 2023, the Bank of England published a proposal outlining mandatory requirements for stablecoin issuers within the region.
These include subjecting the control over the transfer function to the bank, while the payment chain will be required to designate an entity as the payments system operator. The appointed operator will assess risks across the payment chain and implement appropriate controls.
Additionally, stablecoin issuers must fully back their coins with deposits at the Bank of England to ensure easy accessibility and supply.
The overall regulation of the United Kingdom’s crypto industry is under the purview of three financial authorities , namely the Financial Conduct Authority (FCA), Payment Systems Regulator (PSR), and Bank of England.
Find out more about industry regulations in the United Kingdom:
UK Goes After Crypto ‘Finfluencers:’ FCA Cracks Down on Promotions
Discover ongoing regulatory efforts in Japan for crypto expansion:
Japan to Greenlight Crypto for Venture Capital Investments
