The United Kingdom government revealed plans this week to push through the long-awaited cryptocurrency regulations within the next six months.

Speaking at a cryptocurrency industry event in London this week, Bim Afolami, the Economic Secretary to the Treasury, stated that the government aims to establish rules on stablecoins and staking services by August.

The UK to Enact Crypto Regulations in 224

Stablecoins are cryptocurrencies pegged to traditional assets like the US dollar or pound sterling to minimize volatility. Staking allows cryptocurrency holders to earn rewards for helping validate blockchain networks.

"We're very clear that we want to get these things done as soon as possible. And I think over the next six months, those things are doable," said Afolami during the Coinbase crypto event on Monday.

The move comes after years of promises to regulate the multi-billion pound industry. In October 2022, the Treasury pledged to provide guidance on stablecoins and staking, but a concrete timeline was never set.

The UK government plans to get new rules governing stablecoins and staking services for crypto assets approved by lawmakers within the next six months, Economic Secretary to the Treasury Bim Afolami says https://t.co/W2v6NBbPwA

— Bloomberg (@business) February 19, 2024

Cryptocurrency regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term was a core pledge of Prime Minister Rishi Sunak's leadership campaign in 2022. However, little progress has occurred since his election, hampering growth of the sector.

The government faces pressure to deliver rules before the next general election, expected in early 2025. But, Afolami admitted he could not provide a timeline for regulating crypto exchanges and other major industry players.

"There’s just a huge amount going on, so I don’t want to commit to that now," he stated.

All eyes will now turn to Westminster to track whether the government can turn this rhetoric into a reality within the next six months.

Light Crypto Regulation in the UK

The cryptocurrency industry contributes billions to the UK economy each year. Clear oversight is seen as necessary to protect consumers and facilitate ethical innovation in the space. It's worth noting that just a few months ago, the Bank of England claimed that stablecoins pose "a significant risk to financial stability."

Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term are currently lightly regulated in the UK, but stricter rules are expected to come into effect over the next year. The Financial Conduct Authority (FCA) is the main financial regulator overseeing cryptocurrencies. So far, the FCA has mainly focused on anti-money laundering rules for cryptoasset firms. New rules introduced in 2023 brought crypto promotion and advertising under FCA regulation, including marketing and consumer protection standards. The FCA also oversees some security tokens that provide rights akin to traditional investments.

However, comprehensive formal regulation is still lacking but expected to come through legislation in 2024. The UK government has confirmed plans to regulate crypto exchanges, trading platforms, custodians and more under traditional financial services rules, likely including reserve requirements, governance, market conduct and consumer protection.

The UK aims to become a global hub for ethical crypto innovation. While cryptoassets remain high-risk investments currently lacking oversight, formal legislation is seen as essential to building trust and confidence, according to industry leaders. The entire industry is awaiting concrete action from the government to deliver on its promises of regulation within the next year.