The UK government aims to finalize a comprehensive legal framework for cryptocurrencies, stablecoins, and digital assets by early 2025.
At the Tokenisation Summit on November 21, the UK Treasury announced plans to establish detailed regulations to enhance transparency and efficiency in managing digital assets. This move comes as the UK faces legal competitive pressure from the European Union (EU) and the US, as these regions continuously push for modern cryptocurrency policies to establish a global advantage.
The UK government minister in charge of the economy, Ms. Tulip Siddiq, emphasized that the new legal framework will cover many areas, from stablecoins, staking services to cryptocurrencies. According to her, a synchronized regulatory system will help reduce complexity and ensure consistency in implementation. In particular, Ms. Siddiq believes that stablecoins are currently not compatible with existing payment regulations, and necessary amendments have been under study since October 2023.
The government is also committed to eliminating legal uncertainty surrounding staking services, ensuring that this service is not classified as a collective investment scheme subject to unnecessary restrictions.
The UK's acceleration in completing the legal framework shows an effort to catch up with global trends. While the EU is ready to implement the Markets in Crypto-Assets (MiCA) regulation by the end of this year, providing legal clarity for the cryptocurrency industry, the newly elected President Donald Trump’s administration in the US is also predicted to adopt more cryptocurrency-friendly policies.
These changes place significant pressure on the UK, a country that once committed to becoming a global cryptocurrency hub but is being criticized for its unfriendly legal environment, largely due to the strict approach of the Financial Conduct Authority (FCA).
Although the UK government under the Conservative Party had promised to announce a new legal framework in July, this commitment has not been fulfilled. So far, the most significant effort under the Labour Party is a proposed law in September 2024, aimed at recognizing digital assets such as NFTs, cryptocurrencies, and carbon credits. However, delays in issuing specific regulations have led the UK to be viewed as lagging behind other regions.
