The UK government plans to get new rules governing stablecoins and staking services for cryptoassets approved by lawmakers within the next six months as pressure ratchets up to deliver on specific proposals ahead of an impending general election.
Economic Secretary to the Treasury Bim Afolami, speaking at an industry event hosted by Coinbase in London on Monday, said the government was “pushing very hard” on making legislation happen.
“We're very clear that we want to get these things done as soon as possible. And I think over the next six months, those things are doable,” Afolami said.
The Treasury first pledged in October to provide more clarity on specific areas of crypto by some point in 2024. That commitment followed an earlier consultation on fiat-backed stablecoins — digital tokens that use reserves of assets to maintain a one-to-one value with a traditional currency like the dollar or pound — and the passing of the larger Financial Services and Markets Act last summer.
Market observers like blockchain analytics firm Elliptic have said they expect to see fiat-backed stablecoins and their issuers regulated under existing payments laws, a move that would provide the UK's financial regulator with the means to dictate which types of assets can support a stablecoin.
Staking, a process whereby investors lock up their tokens to help keep a blockchain operating in return for a small yield, is expected to receive a new classification that avoids being considered a collective investment, Tom Duff Gordon, vice president for international policy at Coinbase, said in an interview.
Broader proposals that would bring crypto exchanges and other industry providers under existing financial services rules remain in limbo. When asked if that guidance might also become legislation this year, Afolami said he was unable to provide a timeline.
Prime Minister Rishi Sunak first pledged to make the UK a global crypto hub in 2022, seeking to attract more digital-asset businesses and investment to the country. Relatively little regulatory progress has been made since then, even as crypto firms say a lack of clear rules has made it hard for them to operate.
“Short answer is, I don't know,” Afolami said of a timeline on broader crypto regulation beyond stablecoins and staking. “There's just a huge amount going on, so I don't want to commit to that now.”
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