The British government has unveiled its intentions this week to expedite the long-awaited cryptocurrency regulations within the upcoming six months.
Addressing a cryptocurrency industry gathering in London, Bim Afolami, the Economic Secretary to the Treasury, outlined the government’s objectives to establish regulations concerning stablecoins and staking services by August.
“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,” remarked Afolami during the Coinbase crypto event on Monday.
This initiative follows years of assurances to regulate the multibillion-pound industry.
In October 2022, the Treasury committed to issuing guidance on stablecoins and staking, albeit without setting a definite timeline.
Cryptocurrency regulation formed a central promise of Prime Minister Rishi Sunak‘s leadership campaign in 2022.
Nonetheless, progress has been sluggish since his appointment, impeding the sector’s expansion.
The government faces pressure to enact regulations before the anticipated general election in early 2025.
However, Afolami conceded an inability to provide a timeline for regulating crypto exchanges and other major industry players.
“There’s just a huge amount going on, so I don’t want to commit to that now,” he explained.
All eyes will now be on Westminster to monitor whether the government can translate its rhetoric into tangible action within the next six months.
The cryptocurrency industry significantly contributes to the UK economy annually. Transparent oversight is deemed essential to safeguard consumers and foster ethical innovation in the sector.
Notably, the Bank of England cautioned a few months ago that stablecoins pose “a significant risk to financial stability.”
Presently, cryptocurrencies are lightly regulated in the UK, with stricter regulations expected to come into effect over the next year.
The Financial Conduct Authority (FCA) serves as the primary financial regulator overseeing cryptocurrencies.
To date, the FCA has primarily concentrated on anti-money laundering measures for cryptoasset firms. New regulations introduced in 2023 brought crypto promotion and advertising under FCA oversight, encompassing marketing and consumer protection standards.
Additionally, the FCA supervises some security tokens that provide rights comparable to traditional investments.
However, formal comprehensive regulation is still lacking but anticipated to materialize through legislation in 2024.
The UK government has confirmed intentions to regulate crypto exchanges, trading platforms, custodians, and more under conventional financial services regulations, likely encompassing reserve requirements, governance, market conduct, and consumer protection.
The UK aspires to emerge as a global centre for ethical crypto innovation. While cryptoassets currently represent high-risk investments lacking oversight, formal legislation is deemed crucial for instilling trust and confidence, according to industry leaders.
The entire industry eagerly anticipates concrete action from the government to fulfil its promises of regulation within the next year.