UK to Regulate Stablecoins and Staking by 2025

The UK Labour government has announced plans to introduce a unified regulatory framework for cryptocurrencies, focusing on stablecoins and staking, by early 2025. The initiative, revealed at the City & Financial Global Tokenisation Summit in London, aims to ensure the UK remains competitive in the global crypto landscape.

Unified Framework for Streamlined Oversight

Economic Secretary to the Treasury, Tulip Siddiq, stated that the proposed framework will simplify oversight and better align regulations with industry requirements. It will replace current rules for stablecoins governed by UK payment services regulations, recognising their role as asset-backed digital currencies.

Stablecoins are integral to the digital asset ecosystem, providing faster and cheaper settlements for trading, payments, and remittances compared to traditional banking systems.

Staking to be Clarified

The government also plans to address the legal status of staking, where users lock tokens to support blockchain operations and earn rewards. Siddiq indicated support for treating staking as a technology service rather than a collective investment scheme, sparing it from stricter financial regulations.

This initiative follows delays under the previous Conservative government, which had intended to pass similar legislation earlier in 2024. Siddiq highlighted that consolidating these regulations into a single phase would be more efficient and coherent.

Competing on the Global Stage

The UK’s move comes as the EU prepares to implement its Markets in Cryptoassets (MiCA) regulation by the end of 2024. Experts warn that without clear crypto rules, the UK risks losing its edge.

Innokenty Isers, founder of crypto platform Paybis, called the framework a “strategic move” to attract innovation and economic growth. “If the UK doesn’t catch up, it risks missing out on the next wave of financial transformation,” he said.

This regulatory push underscores the UK’s ambition to remain a global hub for financial innovation while ensuring consumer protection and market stability.