Thomas Daniels
In a significant development in the realm of digital currencies, the UK government is gearing up to introduce an extensive regulatory framework for stablecoins along with other cryptocurrency services including staking, exchange, and custody by the third quarter of this year. The announcement was made by Economic Secretary Bim Afolami during the Innovate Finance Global Summit. Afolami highlighted the swift progress in establishing this regulatory framework, noting that legislation is swiftly advancing to solidify the new regulatory proposals.
This forthcoming legislation is set to usher various cryptocurrency operations such as exchanges and custodial services into the realm of regulatory oversight for the first time. The groundwork for these regulations was laid last year through a substantial financial markets bill that classified stablecoins and other cryptocurrency activities as regulated financial services within the UK. The Financial Conduct Authority (FCA) and the Bank of England (BoE) have been instrumental in shaping this approach, with the BoE set to oversee stablecoin entities that present systemic risks, while the FCA will regulate the broader cryptocurrency market.
Furthering this regulatory expansion, Afolami disclosed in February that additional legislation specifically targeting stablecoins was in the works and expected to be completed within the next six months. This move reflects the UK’s gradual enhancement of its cryptocurrency adoption through strategic regulatory and legislative initiatives.
Moreover, last week marked a milestone for the London Stock Exchange (LSE) as it started accepting listing applications for Bitcoin and Ethereum exchange-traded notes (ETNs), akin to Bitcoin ETFs in the U.S. These ETNs are slated to commence trading on May 28, offering institutional investors a new avenue to access the crypto market.
