Competing with EU MCA’s New Stablecoin Rules
The UK is preparing to introduce a crypto-regulatory framework by 2025. The announcement, made at the City of London and Finance's Global Tokenization Summit, demonstrates the Labor government's commitment to balancing innovation with security in the digital asset space.
Enter to find out what it means to you!
What's Changing for Stablecoins and Staking?
According to Bloomberg, the new framework will provide a major overhaul of how stablecoins and staking will be regulated. Currently, stablecoins fall under the rules of payment services, which does not fit well with the unique role of attaching value stability to currencies like the US dollar. Under the revised rules, stablecoins will get their own customized guidelines designed to fit their purpose and support their growth.
The government aims to check the legal uncertainty in the matter. Staking, where users lock up tokens to fund blockchain operations and earn rewards, is often considered a collective investment scheme, which brings with it strict financial regulations. The government plans to classify it as a technology service, which will make staking easier to thrive without unnecessary red tape.
why now
The timing is strategic. The European Union is about to implement the Markets in Crypto Assets (MiCA) framework, and the incoming Trump administration in the US is showing a crypto-friendly stance. Both regions are moving fast, and the UK doesn't want to be left behind in what many see as the next financial revolution.
Industry response
Treasury Economic Secretary Tulip Siddique explained that tackling everything at once made sense, especially after the delays caused by the general election. Streamlining stablecoins and putting regulations into a single framework is key to encouraging innovation while ensuring security, she added.
Paibis founder Innocent Esser hailed the move, stressing its importance. “If the UK does not meet the EU's MCA framework or the pro-crypto sentiment of Trump's election, it risks missing out on major financial opportunities,” he said.
Adding to this, Circle's head of global policy, Dante Dispart, said in October that he expects the UK to introduce stablecoin regulations within months, not years. “We will wait,” he added, as companies wait for clear rules.
Will the UK continue its current trend to capitalize on this trillion dollar industry? let's see!
