The UK government reiterates its commitment to crypto regulation as City Minister Tulip Siddiq declares digital assets as ‘here to stay’.
- Draft legislation for regulating the crypto industry is anticipated early next year, according to Economic Secretary Tulip Siddiq.
- The government will uphold the previous administration’s stance on creating new regulated activities for cryptoassets.
- Stablecoins will not be brought into UK payments regulation currently, despite proposals for adequate consumer protections.
- The FCA maintains concerns about crypto platforms, highlighting ongoing regulatory scrutiny in the sector.
The UK government has reaffirmed its commitment to the regulation of digital currencies through a recent speech by the Economic Secretary to the Treasury, Tulip Siddiq. She announced that cryptoassets are “here to stay” and confirmed plans for draft legislation expected early next year. This legislation is set to enhance the regulatory framework for the crypto industry as the value of digital currencies, such as Bitcoin, continues to rise.
Siddiq addressed her remarks to attendees of the Tokenisation Summit, emphasising that recent quiet in regulatory developments does not mean inactivity. The Treasury’s work on crypto regulation has been ongoing, aiming to establish a draft regulatory framework shortly. This is a continuation from the last government, which had proposed extensive financial services regulations concerning cryptoassets. The latest stance echoes the earlier proposals, focusing on new regulated activities like operating cryptoasset trading platforms.
Siddiq also mentioned plans to regulate stablecoins, though it was noted that these would not be included in the UK payments regulation at present. The previous government’s suggestions for fiat-referenced stablecoins included amending UK payments regulations to protect consumers using stablecoins for retail payments. However, Siddiq indicated that applying these regulations to stablecoin activities currently would impose disproportionate burdens relative to their usage.
The Financial Conduct Authority (FCA) continues to express concerns about the risks associated with cryptoassets. It has previously warned consumers about the potential to “lose all their money” when investing in these volatile markets. This apprehension resulted in a clash with Binance, one of the world’s largest crypto exchanges, which previously faced a UK ban in 2021. The exchange resumed operations through a partnership with a FCA-regulated entity, but FCA’s concerns about its business practices remain.
The UK’s stance on crypto regulation remains firm, with plans to implement comprehensive legislation while maintaining cautious oversight from the FCA.
