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UK plans new laws on stablecoins and crypto staking

UK plans new laws on stablecoins and crypto staking

GrafaGrafa2024/11/15 09:00
By:Isaac Francis

The UK government is set to introduce new legislation focused on stablecoins and crypto staking, aiming to strengthen its regulatory framework amid rising competition from the U.S.

Following President-elect Donald Trump's win and his intent to position the U.S. as a global crypto hub, British officials are working to retain and attract digital asset firms.

The UK Treasury is reportedly drafting two legislative proposals: one to regulate stablecoins and another to provide exemptions for crypto staking from existing financial regulations.

This move seeks to address industry concerns and avoid treating staking as a collective investment scheme, which would subject it to stricter oversight.

According to Bloomberg, the Financial Conduct Authority (FCA) is expected to initiate consultations on stablecoin rules early next year.

The regulatory body will implement a phased strategy that starts with stablecoin regulation and extends to broader aspects of the crypto market.

The government is also preparing updates on the digital securities sandbox, a joint initiative by the FCA and the Bank of England for blockchain testing.

Laura Navaratnam, policy lead at the Crypto Council for Innovation, noted that the UK must act swiftly to leverage a potential "second-mover advantage" to remain competitive.

She acknowledged that the country is not as advanced in its crypto regulations as officials would prefer.

The legislative push follows delays from earlier plans under former Prime Minister Rishi Sunak.

Stablecoin regulation, initially intended to boost the UK’s appeal to digital asset companies, was postponed after the general election that brought Labour's Keir Starmer to power.

In 2023, the UK had already committed to offering guidance on stablecoins as part of the Financial Services and Markets Act.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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