The UK Treasury announces comprehensive regulatory planning.
According to a report by Bloomberg, Tulip Siddiq, the Economic Secretary to the UK Treasury, announced at the City & Financial Global Tokenization Summit held in London on November 21 that the UK will launch a draft regulatory framework for crypto assets early next year. This regulatory framework will adopt a comprehensive planning approach, covering key industries such as cryptocurrencies, stablecoins, and staking services. Siddiq emphasized at the event: "Bringing all regulations at once is not only simpler but also more reasonable." This decision shows the UK government's more proactive and systematic approach to crypto asset regulation.
Source: City & Financial Global. Tulip Siddiq, the Economic Secretary to the UK Treasury, announced at the 'City & Financial Global Tokenization Summit' that the UK will launch a draft regulatory framework for crypto assets early next year.
Some regulatory provisions were originally expected to be announced months ago, but with the resignation of the Conservative government led by Prime Minister Rishi Sunak, these plans were also put on hold. The new government formed by Labour leader Keir Starmer on July 5 will be responsible for proposing and implementing this new regulatory framework. This policy shift not only demonstrates the new government's emphasis on crypto asset regulation but also reflects the UK's determination to maintain its competitive advantage in the wave of global fintech development.
Regulatory Focus on Stablecoins and Staking Services
In this regulatory framework, stablecoins and staking services have become the focal points of attention. According to Siddiq's detailed explanation, due to the significant differences in the use cases of stablecoins compared to existing payment service regulations, a dedicated regulatory framework needs to be established. This stablecoin legislative initiative can be traced back to a series of discussion papers released in October 2023, which was originally expected to be implemented by 2025 at the earliest, but has now been incorporated into this comprehensive regulatory framework.
Another issue that has attracted significant industry attention is the legal positioning of staking services. In this regard, Siddiq made it clear: "It is unreasonable to classify staking services as 'collective investment schemes'; the government will work to eliminate legal uncertainty in this area." This statement is clearly in response to the concerns of the crypto industry, as classifying staking services as collective investment schemes would bring additional regulatory restrictions that could impact industry development. The new regulatory framework will provide these services with a clearer legal status, contributing to the healthy development of the industry.
The UK Faces Global Regulatory Competition Pressure in Crypto
Despite the former Conservative government's repeated expressions of ambition to make the UK a global cryptocurrency hub, the regulatory environment in the UK has been seen as challenging by the industry. This view is often attributed to the strict stance of the independent regulatory body, the Financial Conduct Authority (FCA). In contrast, the EU's Markets in Crypto-Assets Regulation (MiCA) is set to come into full effect by the end of the year, providing clear regulatory certainty across the European continent. Meanwhile, the incoming government in the United States is widely expected to adopt a pro-crypto stance, further testing the UK's attractiveness in this multi-billion dollar crypto industry.
It is worth noting that although the previous government promised to introduce new crypto regulatory provisions in July, this ultimately did not materialize. Currently, the only concrete action taken by the Labour government regarding crypto regulation is a bill proposed in September that explicitly defines non-fungible tokens (NFTs), cryptocurrencies, and carbon credits as property to clarify their legal status. While this bill marks an important step, it still appears relatively preliminary compared to the comprehensive regulatory frameworks of other major markets.
As the global crypto asset market continues to evolve, the degree of refinement of the regulatory framework has become an important indicator of competitiveness for countries. The comprehensive regulatory framework launched by the UK not only provides clearer rules of the game for market participants but also demonstrates the UK's determination to reposition itself as a global financial center in the post-Brexit era. However, whether this new regulatory framework can revitalize the UK's competitiveness in the global crypto asset industry remains to be validated by the market's actual response.
"Comprehensive Regulation is Coming! The UK Crypto Regulatory Framework Will Debut Next Year, Including Stablecoins and Staking?" This article was first published in 'Crypto City'.