UK prepares to pass stablecoin legislation
UK prepares to pass stablecoin legislation
The UK intends to legally regulate the services of cryptocurrency companies for the placement of crypto assets and stablecoins. To do so, lawmakers must approve new rules. The government plans to achieve this within the next six months, in order to complete the process before the country's upcoming general election this year.
Bim Afolami, head of the Ministry of Finance, told a meeting organized by Coinbase in London that the government is working hard to ensure the new legislation is passed.
"We want to do it as soon as possible. And I think it can be done within the next six months," Afolami commented. However, he was unwilling to reveal more details about the authorities' plans for the law itself and the new regulatory rules, Bloomberg reported.
Prime Minister Rishi Sunak said in 2022 that Britain should become the "global crypto hub," and in the fall, the Treasury promised more clarity on cryptocurrency regulation by 2024 to allow crypto companies to innovate and expand investment in the UK.
However, despite numerous statements from cryptocurrency companies, no meaningful decisions have yet been made in this direction.
Elliptic analysts expect issuers of fiat backed stablecoins to be regulated under current payment laws. This will allow financial regulators to control what types of assets can back a stablecoin.
Tom Duff Gordon, Coinbase's Vice President of International Policy, believes that staking should receive a new classification so that it is not considered a collective investment. Staking allows blockchain investors to generate income from their tokens in exchange for maintaining the stability of the blockchain.
Industry experts are also pondering whether the new regulations will affect crypto exchanges, which need to be brought in line with financial services regulations, but for now they remain outside of a clear definition system.
The finance minister said he could not give a timeline for when the guidelines developed this year would become law.
"The short answer is, I don't know. There are a lot of things going on, so I don't want to get into that right now," Afolami responded when asked about the details of the cryptocurrency and stablecoin regulation bill.
Read also: Hong Kong's new crypto regulatory regime attracts brokers
