UK to roll out new legislation for crypto and stablecoin by Q3
The British government is set to unveil fresh regulations governing stablecoins and other crypto services such as staking, exchange, and custody by the middle of this year. Economic Secretary Bim Afolami made this announcement during the Innovate Finance Global Summit this week, highlighting significant strides toward establishing a robust regulatory framework. He underscored the swift progress in advancing legislation that will finalize these regulatory proposals.
Upon implementation, this legislation will subject various cryptocurrency operations, including exchanges and custodial services, to regulatory oversight for the first time. Last year, the UK passed a pivotal financial markets bill laying the groundwork for treating stablecoins and broader cryptocurrency activities as regulated financial services within the country. The Financial Conduct Authority (FCA) and the Bank of England (BoE) collaborated early last year to shape the regulatory approach specifically for stablecoins.
Under the new framework, the BoE will supervise stablecoin entities posing systemic risks, while the FCA will oversee the broader cryptocurrency market. Afolami also disclosed in February that supplementary legislation targeting stablecoins was in progress and anticipated to be finalized within the next six months.
The UK has been gradually enhancing its cryptocurrency adoption through recent regulatory and legislative maneuvers. Just last week, the London Stock Exchange (LSE) commenced accepting listing applications for exchange-traded notes (ETNs) linked to Bitcoin and Ethereum. Similar to Bitcoin ETFs in the U.S., these ETNs will enable institutional investors to access the crypto market, with trading slated to commence on May 28.
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