Stablecoin, Staking Laws in the UK to Come in Six Months: Minister

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Stablecoin and staking laws are coming soon in the United Kingdom, said Economic Secretary to the Treasury Bim Afolami. If the timeline is correct, the UK will be one of the few regions around the globe to have actually implemented a regulatory framework for digital assets based on fiat currencies and staking activities. 

As reported earlier by TheCoinRise, Maxine Waters, the American politician serving as the United States representative for California’s 43rd congressional district since 1991, recently confirmed that the United States is also working on a stablecoin regulation and is expected to pass the long-awaited bill.

“We’re working on stablecoin; we’re getting very close,” Waters said. “We’re very, very close—very close.”

Stablecoin Regulation in the UK

As per a report from Bloomberg, the United Kingdom government is on track to secure legislative approval for updated regulations pertaining to stablecoins and staking services in the digital asset space within the next six months. The urgency stems from increasing pressure to implement specific proposals before an imminent general election.

The government was “pushing very hard” for implementing the staking and stablecoin regulation in the UK, said Afolami, while adding: 

“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.”

New Classifications

Industry analysts, including blockchain analytics firm Elliptic, anticipate that fiat-backed stablecoins and their issuers will likely fall under the purview of existing payment laws. This regulatory approach would empower the UK’s financial regulatory authority to determine the permissible types of assets that can underpin a stablecoin.

When it comes to staking, a practice where investors lock up their tokens to support the functionality of a blockchain and receive a modest yield in return, there are expectations of a revised classification. Tom Duff Gordon, Vice President for International Policy at Coinbase, indicated in an interview that the intention is to prevent staking from being classified as a collective investment.

Lack of Clear Rules for Stablecoins and Crypto

Prime Minister Rishi Sunak said that he sought to make the UK a hub of crypto-related activities, but digital asset firms have found it difficult in the region. Recently, Bybit confirmed ending operations in the UK, citing “regulatory change,” due to the regulatory actions of the Financial Conduct Authority (FCA).

“Short answer is, I don’t know,” Afolami said of a timeline on broader crypto regulation. “There’s just a huge amount going on, so I don’t want to commit to that now.”

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