According to Bloomberg, Bim Afolami, the economic secretary to the treasury, said at an event hosted by Coinbase that the UK government is “very determined” to legislate new regulations on stablecoins and crypto staking services within the next six months. The official said that the government intended to “do these things as soon as possible” over the next six months, Bloomberg reported. Although the UK has not yet set a date for its next general election, it is legally required to be held by January 2025.
Afolami’s statement follows the Treasury’s response to the consultation last August, in which it agreed that the Bank of England and the Financial Conduct Authority would co-oversee systematic stablecoins. In October 2023, the UK government published proposals to bring the crypto sector under its scope of financial regulation, including requiring companies to obtain FCA clearance for cryptocurrency transactions.
The new rules for stablecoins could include regulation of the issuance and custody activities of foreign exchange backed stablecoins (FBS) issued in the UK, as well as regulation of the issuance and custody activities of foreign FBS. The propositions also aim to include the use of FBS in UK payment chains in the 2017 Payment Services Regulations, as well as to include them in the 2001 Regulated Business Order.
Those new rules for stablecoins aim to reduce and prevent severe damage, set higher standards, and promote competition and positive change, which would make the UK “the obvious choice” to start and invest in cryptocurrencies projects. Investors and companies should be aware of the risks associated with cryptocurrencies and blockchain-related projects.
