The UK government is aiming to finalize a comprehensive legal framework for cryptocurrencies, stablecoins, and digital assets by early 2025.
At the Tokenisation Summit on November 21, the UK Treasury announced plans to develop detailed regulations to enhance transparency and efficiency in the management of digital assets. This move comes as the UK faces legal competition from the European Union (EU) and the United States, as these regions continue to drive modern cryptocurrency policies to position their global advantage.
Economic Secretary Tulip Siddiq emphasized that the new legal framework will cover a wide range of areas, from stablecoins and staking services to cryptocurrencies. According to her, a harmonized regulatory system will help reduce complexity and ensure reasonable implementation. Specifically, Siddiq stated that stablecoins currently do not fit with existing payment regulations, and the necessary amendments have been under study since October 2023.
The government has also committed to eliminating legal uncertainty around staking services, ensuring that this service is not classified as a collective investment scheme subject to unnecessary restrictions.
The UK's efforts to accelerate the development of a legal framework demonstrate its efforts to keep pace with global trends. While the EU is set to implement the Markets in Crypto-Assets (MiCA) regulation by the end of this year, providing legal clarity for the cryptocurrency industry, the newly elected President Donald Trump's administration in the US is also expected to adopt more crypto-friendly policies.
These changes put significant pressure on the UK, a country that has previously committed to becoming a global cryptocurrency hub but has been criticized for its unfriendly legal environment, largely due to the strict approach of the Financial Conduct Authority (FCA).
Although the UK government under the Conservative Party had promised to unveil a new legal framework in July, this commitment was not fulfilled. The most significant effort under the Labour Party so far has been a legislative proposal in September 2024 to recognize various digital assets such as Non-Fungible Tokens, cryptocurrencies, and carbon credits. However, the delay in issuing specific regulations has caused the UK to be seen as lagging behind other regions.
