UK minister expects to introduce laws on stablecoins and staking within six months

Author: Emily Nicolle, Bloomberg; Compiler: Deng Tong, Golden Finance

• Treasury minister says secondary legislation is a priority;

• Broader rules governing cryptocurrency exchanges remain pending.

The UK government plans to get new regulations for stablecoins and crypto-asset staking services through the legislative process within the next six months, as in the upcoming Ahead of the election, pressure is building on the government to deliver on concrete proposals.

Bim Afolami, Minister of Economic Affairs and Finance, said the government was working “very hard” on the legislation.

Afolami said: "We are very clear that we want to get these things done as quickly as possible. I think within the next six months, these things are feasible."

The Ministry of Finance has committed for the first time in October last year to provide more clarity on specific areas of cryptocurrency. The commitment follows an earlier consultation on fiat-backed stablecoins, which use asset reserves to maintain a one-to-one value against traditional currencies such as the U.S. dollar or British pound. digital currency, and follows the passage of the larger Financial Services and Markets Bill last summer.

Market observers such as blockchain analytics firm Elliptic said they expect fiat-backed stablecoins and their issuers to be regulated by existing payments laws, a move that would provide U.K. financial regulators with Decide what types of assets can support stablecoins.

Staking is when investors lock up tokens to help keep the blockchain running in exchange for a small gain, said Tom Duff Gordon, vice president of international policy at Coinbase. process, is expected to be reclassified to avoid being viewed as a collective investment. said in the interview.

Broader proposals to bring cryptocurrency exchanges and other industry providers into existing financial services rules remain pending. Asked whether the guidance might also become legislation this year, Afolami said he could not provide a timeline.

British Prime Minister Rishi Sunak has pledged for the first time to make the UK a global cryptocurrency hub by 2022, seeking to attract more digital asset businesses and investments to the country. Relatively little regulatory progress has been made since then, although cryptocurrency companies say the lack of clear rules makes it difficult for them to operate.

“The short answer is, I don’t know,” Afolami said of the broader cryptocurrency regulatory timeline beyond stablecoins and staking. "A lot has happened, so I don't want to commit to that right now."