A draft legal framework for Cryptoassets will be completed in the UK early next year, a Treasury official promised at the Tokenisation & Capital Markets Summit in London on November 21.
Some regulations were expected in the previous summer, but the general election changed those plans along with the Conservative government of Prime Minister Rishi Sunak. Currently, the Labour government of Keir Starmer, which took office on July 5, 2024, will present these regulations.
A comprehensive legal framework
Treasury Undersecretary Tulip Siddiq said the regulations will cover stablecoins and staking services, as well as Cryptocurrencies themselves, according to a report from Bloomberg report. Siddiq said:
"Doing everything in a single phase is simpler and more logical."
According to Siddiq, the use cases of stablecoins do not fit the existing payment service regulations. Legislation related to stablecoins has been prepared since a series of discussion papers were released in October 2023, but it was never expected to be completed before 2025.
The Cryptocurrency industry hopes that staking services can avoid being considered a "collective investment scheme," as this would bring additional restrictions. Siddiq stated at the conference:
"To me, it is not logical for staking services to be subject to this treatment. The government intends to proceed with removing this legal uncertainty in the right direction."
The UK needs to embrace Cryptocurrencies
The previous Conservative government had expressed ambitions to make the UK a Cryptocurrency hub, but so far, the country has often been seen as a challenging regulatory environment. That perception is often attributed to the Financial Conduct Authority, an independent regulator from the government.
Source: Tulip Siddiq
Meanwhile, the European Union's Markets in Crypto-Assets (MiCA) regulation will take full effect by the end of this year. With the EU providing regulatory certainty and the Trump administration in the US being seen as Cryptocurrency-friendly, the UK is becoming less attractive to the multi-billion dollar Cryptocurrency industry. The previous government had promised new Cryptocurrency regulations in July, but that did not materialize. So far, the only effort by the Labour government on Cryptocurrency regulation is a bill proposed in September to clarify the legal status of Non-Fungible Tokens, Cryptocurrencies, and carbon credits by declaring them as assets.
