- The UK government has published final rules for cryptocurrency regulation.
- Legislation for fiat-backed stablecoins will be introduced by early 2024, starting the first phase of regulation.
- Certain fiat-stablecoin activities will be overseen by the Financial Conduct Authority (FCA).
The UK government published its final rules for regulating cryptocurrencies and stablecoins on Monday, outlining a phased approach to bringing crypto activities under official oversight.
The Treasury plans to introduce legislation on fiat-backed stablecoins by early 2024, marking the first phase of crypto regulation. This will bring certain fiat-stablecoin activities under the authority of the Financial Conduct Authority (FCA).
Algorithmic stablecoins and other crypto areas will follow in later regulatory phases, according to the Treasury’s proposal. The rules come after public consultations earlier this year on crafting a crypto regulatory framework.
UK has sought to establish itself as a crypto hub
The UK has sought to establish itself as a global crypto hub even amid recent market turmoil like the FTX collapse. Parliament passed the Financial Services and Markets Act in June, enabling crypto to be treated as a regulated activity.
In addition to the crypto rules, the Treasury published separate plans on Monday for regulating stablecoins deemed systemically important or that could impact financial stability. This reflects ongoing efforts to mitigate risks as the adoption of stablecoins for payments increases globally.
While crypto remains unregulated in the UK for now, the government’s roadmap provides long-awaited clarity on how digital assets will be governed in the coming years. The FCA will take the reins in overseeing key aspects of the crypto ecosystem.
How the phased policies take shape and adapt to rapid crypto innovation will be closely watched by industry players and regulators worldwide. For now, the UK remains committed to becoming a global crypto and fintech hub.