UK to Roll Out Comprehensive Crypto Regulations by Early 2025

Despite delays caused by last years election turmoil, the United Kingdom (UK) is set to introduce a robust regulatory framework for cryptocurrencies by early 2025. The framework aims to provide clarity and structure for the rapidly evolving industry.

Economic Secretary to the Treasury Tulip Siddiqs announcement at the City & Financial Global Tokenisation Summit earlier this week signals the Labour governments commitment to addressing longstanding uncertainties in the sector.

Building on the foundations laid by the previous Conservative administration, she noted that the government intends to implement a range of measures designed to regulate crypto activities comprehensively. These include rules for stablecoins, staking services, and other emerging areas of the digital asset ecosystem.

According to Siddiq, Under the framework, stablecoins will be regulated as part of the broader crypto asset regime, focusing on their use as payment instruments and ensuring they maintain their peg to fiat currencies. Notably, staking services, another critical area, will no longer be classified as collective investment schemes, addressing concerns around their treatment under existing laws.

We aim to engage firms on draft legal provisions for the crypto asset regime, including stablecoins, as early as possible next year. Siddiq stated at the summit. This approach reflects the governments intent to involve industry stakeholders in shaping a framework that balances innovation with consumer protection.

The UKs plans come as the European Unions comprehensive crypto regulations under the Markets in Crypto Assets (MiCA) framework begin taking effect. Mica provides a unified approach to crypto regulation across the EUs 27 member states, including licensing requirements for service providers. The UK aims to remain competitive as a financial innovation hub by aligning its timeline with global regulatory efforts.

The initiative also fulfills the vision of the previous government under then-Prime Minister Rishi Sunak, who championed turning the UK into a global crypto hub. The Financial Services and Markets Act, enacted under the Conservatives, had already empowered regulators to treat crypto as regulated and laid the groundwork for a market abuse regime and other measures.

In November 2023, the United Kingdoms Treasury (HMT) introduced a comprehensive regulatory framework for crypto assets, reaffirming the countrys commitment to fostering blockchain and cryptocurrency innovation. In October, the UK introduced the Economic Crime and Corporate Transparency Act, empowering authorities to freeze and confiscate cryptocurrencies linked to money laundering and drug trafficking.

Nonetheless, while these measures are significant, introducing a comprehensive, predictable, and industry-specific regulatory framework marks a major step forward, one that has been widely viewed as a bullish signal by crypto investors.

Text source: ZyCrypto

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