The UK government will introduce new regulations for stotcoins and crypto staking services in the next six months, Treasury Economic Secretary Beam Afolami has said.
Speaking at an industry event hosted by Coinbase in London on Monday, he said the government is “pressing hard” to get legislation on the books.
The Treasury promised in October to clarify regulations in the crypto domain by 2024. Since then he has consulted extensively on fiat-backed stablecoins and financial services and markets law.
The financial regulator will increase its oversight of asset-backed digital tokens as market experts predict that fiat-backed stablecoins will fall under existing payment rules.
Coinbase itself has always been heavily involved in the management of the USDC stablecoin. Last summer, the San Francisco-based crypto exchange acquired a stake in Circle. As a result, the Center, which was managed by the USDC, was disbanded. Circle will issue EuroOK, a 1:1 euro-backed stablecoin, starting in 2022.
The UK government plans to decentralize staking, a mechanism for token holders to earn rewards for supporting blockchain operations. That could be good news for Coinbase, which has faced a pushback from regulators for its US customers.
Despite these developments, broader regulations for crypto exchanges and industry services are uncertain, with no clear timeline for legislation. Prime Minister Rishi Sunak Their pledge to establish the UK as a leading crypto hub by 2022 has seen little regulatory progress, with industry players citing a lack of crucial regulations as a significant operational barrier.
And it's worth pointing out that Afolami stopped short of laying out a deadline for comprehensive crypto regulation, demonstrating the broad scope of legislative efforts underway.
In October, the UK government introduced new laws to make it easier for authorities to seize crypto associated with illegal activity—especially without a prior conviction. It's a step away from previous legislation that allowed law enforcement agencies to release their money, but not confiscate it until an individual is arrested and convicted.
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