World Crypto Global
- Written by: Damian Chmiel
- Tue, 20 Feb 2024
- Israel
The UnitedKingdom government revealed plans this week to push through the long-awaitedcryptocurrency regulations within the next six months.Speaking ata cryptocurrency industry event in London this week, Bim Afolami, the EconomicSecretary to the Treasury, stated that the government aims to establish ruleson stablecoins and staking services by August.The UK to Enact CryptoRegulations in 224Stablecoinsare cryptocurrencies pegged to traditional assets like the US dollar or poundsterling to minimize volatility. Staking allows cryptocurrency holders to earnrewards for helping validate blockchain networks."We'revery clear that we want to get these things done as soon as possible. And Ithink over the next six months, those things are doable," said Afolamiduring the Coinbase crypto event on Monday.The movecomes after years of promises to regulate the multi-billion pound industry. InOctober 2022, the Treasury pledged to provide guidance on stablecoins andstaking, but a concrete timeline was never set.The UK government plans to get new rules governing stablecoins and staking services for crypto assets approved by lawmakers within the next six months, Economic Secretary to the Treasury Bim Afolami says https://t.co/W2v6NBbPwA Bloomberg (@business) February 19, 2024Cryptocurrencyregulation was a core pledge of Prime Minister Rishi Sunak's leadershipcampaign in 2022. However, little progress has occurred since his election,hampering growth of the sector.Thegovernment faces pressure to deliver rules before the next general election,expected in early 2025. But, Afolami admitted he could not provide a timelinefor regulating crypto exchanges and other major industry players."Theresjust a huge amount going on, so I dont want to commit to that now," hestated.All eyeswill now turn to Westminster to track whether the government can turn this rhetoric into a reality within the next six months.Light Crypto Regulation inthe UKThecryptocurrency industry contributes billions to the UK economy each year. Clearoversight is seen as necessary to protect consumers and facilitate ethicalinnovation in the space. It's worth noting that just a few months ago, the Bank of England claimed that stablecoins pose "a significant risk to financial stability."Cryptocurrenciesare currently lightly regulated in the UK, but stricter rules are expected tocome into effect over the next year. The Financial Conduct Authority (FCA) isthe main financial regulator overseeing cryptocurrencies. So far, the FCA hasmainly focused on anti-money laundering rules for cryptoasset firms. Newrules introduced in 2023 brought crypto promotion and advertising under FCAregulation, including marketing and consumer protection standards. The FCAalso oversees some security tokens that provide rights akin to traditionalinvestments.However,comprehensive formal regulation is still lacking but expected to come throughlegislation in 2024. The UK government has confirmed plans to regulate cryptoexchanges, trading platforms, custodians and more under traditional financialservices rules, likely including reserve requirements, governance, marketconduct and consumer protection. The UK aimsto become a global hub for ethical crypto innovation. While cryptoassets remainhigh-risk investments currently lacking oversight, formal legislation is seenas essential to building trust and confidence, according to industry leaders.The entire industry is awaiting concrete action from the government to deliveron its promises of regulation within the next year.This article was written by Damian Chmiel at www.financemagnates.com.
