UK Economic Secretary Declares Intention to Introduce Crypto Regulatory Framework by the Beginning of the Next Year
According to Tulip Siddiq, the Economic Secretary to the Treasury, the proposed framework will streamline regulations regarding stablecoins.
In the early part of the upcoming year, the United Kingdom intends to establish a comprehensive regulatory framework for the cryptocurrency sector.
Tulip Siddiq, the Economic Secretary to the Treasury, stated at a London conference on Thursday that the proposed framework will unify the regulations for stablecoins, which are digital currencies that are linked to assets such as the U.S. dollar and staking services.
“It is more logical and straightforward to complete everything in a single phase,” he stated. These measures were initially anticipated during the previous Conservative administration; however, they were postponed as a consequence of the July general election, which yielded a resounding victory for Keir Starmer’s Labour Party.
Stablecoins will no longer be subject to the current regulation of payment services as a result of the new framework.
Siddiq contended that this classification is inappropriate due to the evolving use cases of stablecoins. The United Kingdom is currently advocating for regulatory clarity in order to mitigate the increasing competition from the United States, where the incoming administration of President-elect Donald Trump has been actively courting crypto businesses.
Some companies have been hesitant to invest in the United Kingdom due to the delayed action on legislation, particularly in light of the European Union’s Markets in Cryptoassets (MiCA) regulation, which is scheduled to take effect by the end of the year.
The industry has also advocated for the exclusion of staking services, which involve investors locking tokens to support blockchain operations, from being classified as collective investment schemes. This classification would subject them to more rigorous scrutiny.
Siddiq reiterated this sentiment, underscoring the government’s commitment to addressing the legal uncertainties associated with staking.
“For me, the treatment of staking services in this manner is illogical,” Siddiq stated at the Tokenisation Summit. “We will resolve this matter in a manner that is appropriate.”
Dante Disparte, Circle’s global director of policy, predicted that the United Kingdom would implement stablecoin regulations within the next few months in October.
Disparte stated, “I believe we are likely within months, not years,” in reference to the anticipated stablecoin regulations.
Presently, the stablecoin market in the United States is unregulated, despite its current valuation of more than $140 billion.
Senators Cynthia Lummis and Kirsten Gillibrand recently collaborated to introduce a new measure that is designed to regulate stablecoins.
The proposed legislation would impose reserve and operational requirements on payment stablecoin issuers, which would include the establishment of subsidiaries that are exclusively responsible for the issuance of stablecoins.
The bill defines payment stablecoins as digital assets that are pegged to the U.S. dollar and are intended for use as a means of payment or settlement.
The asset would not be classified as a security, and issuers would be obligated to convert it to dollars. Non-depository trust companies that are enrolled with the Federal Reserve Board of Governors or depository institutions that are authorized as national payment stablecoin issuers would be eligible to become issuers. Their operations would be regulated by both state and federal agencies.
