On November 21, the UK government officially announced plans to implement a comprehensive legal framework for cryptocurrency and staking activities at the beginning of 2025. The announcement was made at the Tokenisation Summit in London, marking an important step in regulating the cryptocurrency industry. This effort aims to bring the country up to speed with the development pace of the international market, given that it has lagged behind regions like the European Union (EU) with the MiCA Regulation or the United States under President Trump.
Legal Framework for Cryptocurrency
According to Ms. Tulip Siddiq, Economic Secretary to the UK Treasury, the upcoming legal framework will be synchronized, addressing regulations on cryptocurrency, stablecoins, and staking. Instead of issuing separate regulations, this comprehensive approach is expected to enhance efficiency and consistency.
Stablecoins are one of the key issues. The UK government acknowledges that stablecoins do not fit within the current regulations regarding payment services and requires a separate approach. Although research on stablecoins began in 2023, it is expected that these regulations will not be finalized and officially implemented until 2025.
Regarding the staking sector, Ms. Siddiq confirmed that the government will not view this activity as part of a 'collective investment scheme.' This will eliminate unnecessary legal restrictions, facilitating the growth of staking activities.
Ambition to Lead the Global Crypto Industry
The ambition to make the UK a global cryptocurrency hub, once proposed by former Prime Minister Rishi Sunak, has faced challenges following the change of government. However, the Labour Party, since taking power in July 2024, has made strong moves to accelerate the legislative process for this industry.
In September 2024, the government submitted a bill to classify digital assets, laying the groundwork for the new legal framework. The issuance of a comprehensive legal framework in 2025 will not only boost the domestic cryptocurrency market but also help the UK maintain competitiveness against rivals like the EU and the United States. This is also expected to attract more investment flows into the crypto sector from both domestic and international sources.
Expected Impact
This legal framework not only promises to provide clarity for investors and businesses operating in the cryptocurrency sector but also contributes to enhancing the UK's position in the global financial market. This is a strategic move to ensure that the country does not fall behind in the race to lead the rapidly growing digital finance industry.