The United
Kingdom is gearing up to introduce new legislation for cryptocurrencies and
stablecoins by June or July 2024, according to the Economic Secretary, Bim Afolami.
Speaking at the Innovate Finance Global Summit on Monday, Afolami stated that
the government is working swiftly to deliver the legislation that will put the
final proposals for the crypto regulatory regime in place.
“We
are now working at pace to deliver the legislation to put our final proposals
for our regime in place,” Afolami said during the Innovate Finance Global
Summit.
The
announcement comes after the UK passed the Financial
Services and Markets Act in June 2023, which enabled cryptocurrencies to be
treated as regulated financial activities.
“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,” the Economic Secretary
added.
The
government has expressed its intention to make the UK a preferred destination
for the crypto industry and plans to bring relevant activities under the
purview of the Financial Conduct Authority (FCA). In the meantime, new
regulations concerning the promotion of digital assets have come
into effect in the country.
“While it
remains to be seen exactly what new regulation may look like and how it will be
enforced, it’s inevitable that the future of crypto lies within far more
regulated and supervised parameters,” Duncan Ash, the Head of Strategy at blockchain
protection firm Coincover commented
in an op-ed article for Finance Magnates.
Regulatory Winds of Change
Under the
new regulations, a wide range of crypto asset activities will fall within the regulatory perimeter for the first time, including operating an exchange, custodial services, and other related activities. The FCA will soon consult on an
authorization regime for crypto companies, and the government also plans to
formulate equivalence measures for overseas firms.
The UK
government has taken a phased approach to introducing crypto regulations, with
legislation for fiat-backed stablecoins being the first priority. Other areas,
such as algorithmic stablecoins, will follow as the government brings
activities like lending and trading into the fold of conventional financial
regulation.
Despite the
government’s efforts to create a crypto-friendly environment, the UK industry has faced some challenges. Crypto firms have complained about delays and
poor feedback from the FCA, and recently introduced rules restricting crypto
promotions have led some well-known firms to cut UK services altogether. According
to data from February 2024, the market watchdog issued
over 450 alerts on illegal crypto ads in just three months.
In Europe, Poland
is additionally preparing to regulate cryptocurrencies later this year. Under new laws,
the local financial supervisory authority, KNF, will be allowed to block the
cryptocurrencies of companies and users for 96 hours in cases of mere suspicion
of unregulated trading.
The United
Kingdom is gearing up to introduce new legislation for cryptocurrencies and
stablecoins by June or July 2024, according to the Economic Secretary, Bim Afolami.
Speaking at the Innovate Finance Global Summit on Monday, Afolami stated that
the government is working swiftly to deliver the legislation that will put the
final proposals for the crypto regulatory regime in place.
“We
are now working at pace to deliver the legislation to put our final proposals
for our regime in place,” Afolami said during the Innovate Finance Global
Summit.
The
announcement comes after the UK passed the Financial
Services and Markets Act in June 2023, which enabled cryptocurrencies to be
treated as regulated financial activities.
“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,” the Economic Secretary
added.
The
government has expressed its intention to make the UK a preferred destination
for the crypto industry and plans to bring relevant activities under the
purview of the Financial Conduct Authority (FCA). In the meantime, new
regulations concerning the promotion of digital assets have come
into effect in the country.
“While it
remains to be seen exactly what new regulation may look like and how it will be
enforced, it’s inevitable that the future of crypto lies within far more
regulated and supervised parameters,” Duncan Ash, the Head of Strategy at blockchain
protection firm Coincover commented
in an op-ed article for Finance Magnates.
Regulatory Winds of Change
Under the
new regulations, a wide range of crypto asset activities will fall within the regulatory perimeter for the first time, including operating an exchange, custodial services, and other related activities. The FCA will soon consult on an
authorization regime for crypto companies, and the government also plans to
formulate equivalence measures for overseas firms.
The UK
government has taken a phased approach to introducing crypto regulations, with
legislation for fiat-backed stablecoins being the first priority. Other areas,
such as algorithmic stablecoins, will follow as the government brings
activities like lending and trading into the fold of conventional financial
regulation.
Despite the
government’s efforts to create a crypto-friendly environment, the UK industry has faced some challenges. Crypto firms have complained about delays and
poor feedback from the FCA, and recently introduced rules restricting crypto
promotions have led some well-known firms to cut UK services altogether. According
to data from February 2024, the market watchdog issued
over 450 alerts on illegal crypto ads in just three months.
In Europe, Poland
is additionally preparing to regulate cryptocurrencies later this year. Under new laws,
the local financial supervisory authority, KNF, will be allowed to block the
cryptocurrencies of companies and users for 96 hours in cases of mere suspicion
of unregulated trading.
