UK government set for crypto regulations next year, officials says

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As a seasoned financial analyst with over two decades of experience, I have witnessed the evolution of the global financial landscape from the dot-com boom to the rise of cryptocurrencies. The UK’s decision to establish a new regulatory framework for the crypto industry, including stablecoins, is not only timely but also commendable.

According to reports, it’s expected that the British government will establish a fresh regulatory system for cryptocurrencies, including stablecoins, by the end of next year.

In simpler terms, the freshly established administration of the United Kingdom plans to move forward with cryptocurrency regulations, a process that was put on hold due to the general elections held in July. The newly appointed Prime Minister, Keir Starmer from the Labour Party, will be leading this endeavor.

Tulip Siddiq, an economic secretary at the UK Treasury and City Minister, stated that the current Payment Services Act will not cover stablecoins. However, this digital currency, which is linked to traditional money, will likely fall under new regulations planned for release in early 2025.

Siddiq expressed that performing all tasks simultaneously tends to be less complex and seems more logical, as stated during the Tokenisation Summit hosted by City & Financial Global in London on November 21, according to Bloomberg.

The creation of this legislation has prompted cryptocurrency industries to distance themselves from the UK, while other European nations and regional bodies like the EU have enacted similar regulations halfway through the year.

This year, the European Union introduced the Markets in Crypto-assets (MiCA) regulations. This extensive set of rules is designed to enhance consumer protection and ensure financial stability within the region by establishing a robust regulatory framework for crypto assets.

As a crypto investor, I’ve noticed that countries like France, Switzerland, and Liechtenstein are leading the way in Europe by establishing clear regulations for digital currencies within their borders.

Growing crypto industry in the UK

It’s crucial that the long-anticipated regulations come into effect given the increasing number of markets in Great Britain. Roughly 2.5 million British adults currently hold cryptocurrencies, making up around 5% of the total population.

2022 saw significant growth in both market size and trading volume, reaching approximately $170 billion and $8.5 billion respectively. Furthermore, venture capital investments in cryptocurrency and blockchain startups surpassed $1.9 billion last year.

It has been reported that the United Kingdom, like several other nations, is contemplating the launch of a Central Bank Digital Currency (CBDC), often referred to as a digital pound. Recent updates indicate that this potential project is currently under design by the Bank of England, and they are actively engaging with relevant industries for further discussion.

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2024-11-22 06:22