UK to pass stablecoin legislation in next 6 months

The UK government is seeking to approve new rules for regulating stablecoins, Bloomberg reports, citing the words of politician Bim Afolami.

According to available information, Afolami made the following statement at a themed event organized by Coinbase in London:

“There is no doubt that this needs to be done as quickly as possible. And I think within the next six months we will pass stablecoin legislation.”

Analysts at Elliptic believe that fiat-backed stablecoins and their issuers will be regulated in accordance with existing payment laws. The move will give the UK financial regulator the ability to decide what types of assets can support a stablecoin.

Tom Duff Gordon, vice president of international policy at Coinbase, suggested that cryptocurrency staking in the UK would also receive a new classification. It will no longer be considered a collective investment, he believes.

When asked about the nature and timing of broader regulation of the cryptocurrency space, Afolami did not give a precise answer. It is likely that oversight of cryptocurrency exchanges and other service providers is still under review.

Let us recall that in 2022, British Prime Minister Rishi Sunak proposed turning the state into a global crypto center and attracting more companies involved in digital assets. Since then, relatively little progress has been made in regulating this sector of the market.

In particular, in June 2023, the Financial Services and Markets Act received the assent of King Charles. In November, the UK government urged cryptocurrency users to voluntarily disclose information about unpaid taxes to avoid fines.