The United Kingdom is preparing to introduce new legislation for cryptocurrencies and stablecoins by June or July 2024, according to Economy Secretary Bim Afolami. Speaking at the Innovate Finance Global Summit on Monday, Afolami said the government is working fast to deliver the legislation that will put in place the final proposals for the crypto regulatory regime.
“We are now working fast to deliver the legislation to put in place our final proposals for our regime,” Afolami said at the Innovate Finance Global Summit.
The announcement comes after the UK passed the Financial Services and Markets Act in June 2023, which made it possible to treat cryptocurrencies as regulated financial activities.
“Once it goes live, a whole range of crypto-asset activities, including operating an exchange, custodianship of clients’ assets and other things, will come within the regulatory perimeter for the first time,” the economic secretary added.
The government has expressed its intention to make the UK a preferred destination for the crypto industry and plans to bring relevant activities under the remit of the Financial Conduct Authority (FCA). Meanwhile, new regulations regarding the promotion of digital assets in the country have come into effect.
“While it remains to be seen exactly what new regulation might look like and how it will be enforced, it is inevitable that the future of crypto lies within much more regulated and supervised parameters,” Duncan Ash, the head of strategy at blockchain protection firm Coincover commented in an op-ed article for Finance Magnates.
Regulatory winds of change
Under the new regulations, a wide range of crypto-asset activities will fall within the regulatory scope for the first time, including operating an exchange, custody services and other related activities. The FCA will soon consult on an authorization regime for crypto companies, and the government also plans to formulate equivalence measures for overseas firms.
The UK government has taken a phased approach to introducing crypto regulations, with legislation for fiat-backed stablecoins being the first priority. Other areas, such as algorithmic stablecoins, will follow as the government brings activities such as lending and trading into the fold of conventional financial regulation.
Despite the government’s efforts to create a crypto-friendly environment, the UK industry has faced some challenges. Crypto firms have complained about delays and poor feedback from the FCA, and recent rules restricting crypto promotions have led some well-known firms to cut UK services altogether. According to data from February 2024, the market watchdog issued more than 450 warnings about illegal crypto ads in just three months.
In Europe, Poland is also preparing to regulate cryptocurrencies later this year. Under new laws, the local financial supervisory authority, KNF, will be allowed to block the cryptocurrencies of companies and users for 96 hours in cases of mere suspicion of unregulated trading.
The United Kingdom is preparing to introduce new legislation for cryptocurrencies and stablecoins by June or July 2024, according to Economy Secretary Bim Afolami. Speaking at the Innovate Finance Global Summit on Monday, Afolami said the government is working fast to deliver the legislation that will put in place the final proposals for the crypto regulatory regime.
“We are now working fast to deliver the legislation to put in place our final proposals for our regime,” Afolami said at the Innovate Finance Global Summit.
The announcement comes after the UK passed the Financial Services and Markets Act in June 2023, which made it possible to treat cryptocurrencies as regulated financial activities.
“Once it goes live, a whole range of crypto-asset activities, including operating an exchange, custodianship of clients’ assets and other things, will come within the regulatory perimeter for the first time,” the economic secretary added.
The government has expressed its intention to make the UK a preferred destination for the crypto industry and plans to bring relevant activities under the remit of the Financial Conduct Authority (FCA). Meanwhile, new regulations regarding the promotion of digital assets in the country have come into effect.
“While it remains to be seen exactly what new regulation might look like and how it will be enforced, it is inevitable that the future of crypto lies within much more regulated and supervised parameters,” Duncan Ash, the head of strategy at blockchain protection firm Coincover commented in an op-ed article for Finance Magnates.
Regulatory winds of change
Under the new regulations, a wide range of crypto-asset activities will fall within the regulatory scope for the first time, including operating an exchange, custody services and other related activities. The FCA will soon consult on an authorization regime for crypto companies, and the government also plans to formulate equivalence measures for overseas firms.
The UK government has taken a phased approach to introducing crypto regulations, with legislation for fiat-backed stablecoins being the first priority. Other areas, such as algorithmic stablecoins, will follow as the government brings activities such as lending and trading into the fold of conventional financial regulation.
Despite the government’s efforts to create a crypto-friendly environment, the UK industry has faced some challenges. Crypto firms have complained about delays and poor feedback from the FCA, and recent rules restricting crypto promotions have led some well-known firms to cut UK services altogether. According to data from February 2024, the market watchdog issued more than 450 warnings about illegal crypto ads in just three months.
In Europe, Poland is also preparing to regulate cryptocurrencies later this year. Under new laws, the local financial supervisory authority, KNF, will be allowed to block the cryptocurrencies of companies and users for 96 hours in cases of mere suspicion of unregulated trading.
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