The UK government will introduce new regulations for stablecoins and crypto staking services within the next six months, according to Economic Secretary to the Treasury Bim Afolami.
He was speaking at a Coinbase-hosted industry event in London on Monday, adding that the government is "pushing very hard" to get legislation on the books.
The Treasury made a commitment in October to clarify regulations in the crypto domain by 2024. Since then it's had a number of consultations on fiat-backed stablecoins and the enactment of the Financial Services and Markets Act.
Market experts have been predicting that fiat-backed stablecoins will fall under existing payment laws, enhancing the financial regulator's oversight on asset-backed digital tokens.
Coinbase itself has always been heavily involved in the governance of the USDC stablecoin. Last summer, the San Francisco-based crypto exchange acquired a stake in Circle. As a result, Centre, the consortium that used to govern USDC, was dissolved. Circle also issues EUROC, a 1:1 Euro-backed stablecoin that it launched in 2022.
The UK government plans to categorize staking, a mechanism for token holders to earn rewards for supporting blockchain operations, in a way that avoids collective investment classification. That's likely to be good news for Coinbase, which has faced pushback from regulators over its staking services for U.S. customers.
Despite these advancements, broader regulations for crypto exchanges and industry services remain uncertain, with no clear timeline for legislation. Prime Minister Rishi Sunak's 2022 pledge to establish the UK as a leading crypto hub has seen minimal regulatory progress, with industry players citing the absence of definitive rules as a significant operational hurdle.
And it's worth pointing out that Afolami stopped short of laying out a timeline for comprehensive crypto regulation, highlighting the extensive scope of ongoing legislative efforts.
In October, the UK government enacted new rules to make it easier for authorities to seize crypto that is linked to illicit activity—notably without prior conviction. It's a step up from the rules that previously allowed law enforcement to free funds, but not confiscate them until an individual had been arrested and convicted.