The British government is reportedly readying legislation for stablecoins and crypto staking, exchange and custody.
“We are now working at pace to deliver the legislation to put our final proposals for our regime in place,” said Economic Secretary Bim Afolami, whose comments Monday (April 15) at the Innovate Finance Global Summit were reported by CoinDesk.
“Once it goes live, a whole host of crypto asset activities, including operating an exchange, taking custody of customers’ assets and other things, will come within the regulatory perimeter for the first time,” he said.
This could happen by June or July, the report added.
The British government announced in October plans to bring fiat-backed stablecoins under the oversight of the Bank of England, Financial Conduct Authority and Payment Systems Regulator.
This “altogether will aim to minimize potential for customer harm and mitigate the conduct, prudential and financial stability risks arising from those stablecoins, particularly when used for payments,” the government said in its announcement.
The U.K. treasury released its proposed rules for the crypto sector last February, saying it would subject digital asset companies to the same regulation as traditional finance firms. The government has attempted to balance the need to regulate the crypto sector while still establishing Great Britain as a global hub for cryptocurrencies.
“Our robust approach to regulation mitigates the most significant risks, while harnessing the advantages of crypto technologies,” the treasury said in its announcement. “This enables a new and exciting sector to safely flourish and grow, boosting jobs and investment.”
Meanwhile, the crypto sector remains large unregulated, according to a recent report by the Financial Action Task Force (FATF) showing that under 30% of the world’s jurisdictions are regulating the industry.
“I would describe virtual assets as being akin to water, and essentially they will flow to jurisdictions that are less regulated,” T. Raja Kumar, head of the FATF, told CoinDesk last month. “Criminals and terrorists are very quick to spot the opportunity leading to regulatory arbitrage. We just can’t allow this. Every part of the global chain needs to be strong. This is not a trivial matter.”
Last month also brought a report by the FBI’s Internet Crime Complaint Center (IC3) showing that Americans made more than 43,000 complaints about cryptocurrency scams in 2023, with losses to crypto-based frauds and scams reaching $3.9 billion, a 53% increase year-over-year.
