UK Could Get Stablecoin and Staking Legislation This Year, But What Happens After General Election?
The UK government may not have time to implement stablecoin and staking regulations. (Photo by Jordan Pettitt/PA Images via Getty Images)
- The UK government may only have time to implement stablecoin and staking regulations this year.
- A loss at the general election could see the Labour Party revise or remove Conservative crypto policies.
- The Labour Party plans to make the UK a securities tokenization hub and further CBDC development.
The UK’s current government is training its sights on stablecoin and staking legislation as the clock ticks down on a decisive general election in the second half of the year.
With the Conservative government’s ambitions of turning the UK into a “crypto hub” dwindling by the day, Economic Secretary Bin Afolami has expressed confidence that at least two pieces of legislation will come into force by July 2024.
Stablecoin and Staking Regulations to Come
Speaking at the Financial Times Crypto and Digital Asset Summit 2024, Economic Secretary Bim Afolami was hopeful that the government could implement the necessary regulations around the crypto market.
He appeared confident that the government could implement secondary legislation on stablecoins and staking, which he says are vital areas of the digital asset ecosystem. It seems that these will be the government’s priorities as it faces time constraints during a decisive election year.
Placing emphasis on the importance of ensuring that regulatory scrutiny doesn’t stifle crypto innovation and growth, Afolami was critical of the UK’s “legal eagles”, who he claimed had already slowed progress with their overly cautious approach.
“This is the sort of thinking that has undermined our success in this industry.”
Though this isn’t exactly a new development for the UK’s “crypto hub” ambitions, Afolami’s words may send some reassurance to investors and industry players. However, given the Conservative Party’s continuous string of political, electoral, and legislative failures, there’s not a lot of hope that the government will achieve said aims.
The UK government plans to introduce these new stablecoin and crypto laws by July 2024.
Labour’s Crypto Plans
Labour, the party most likely to replace the Conservatives, published its plans for financial services in January 2024, revealing some interesting ambitions for the UK’s digital asset ecosystem.
This included furthering the ongoing work to create a UK central bank digital currency (CBDC), as well as making the country a global hub for securities tokenization.
“Embracing tokenisation could increase liquidity, provide access to new asset classes and fractionalised assets, and strengthen risk management (by reducing counterparty risks and other operational risks).”
This would include clarifying the laws on tokenization and working with regulators to set a “proportionate, outcomes-based regulatory regime” for the technology. Labour also notes that reports estimate tokenized financial assets could be worth almost $4 trillion globally by 2030.
Time Will Tell
Aside from the fractured party, defections to the Labour Party, and dwindling popularity, the Conservatives have recently experienced a string of historical by-elections and local election defeats have put the government in a tricky position.
With this in mind, the question is, do they have the time, resources, or capability to bring cryptocurrencies and stablecoins under regulation?
With a general election on the horizon, an air of uncertainty surrounds the future of crypto in the UK. Until then, the UK’s future as a “crypto hub” remains uncertain.
If the Conservatives manage to cling on to power, it’s likely that they’ll go full-steam-ahead with their “crypto hub” ambitions, should they manage to reform their fractured party. But, if Labour enters into government, crypto could head in an entirely different direction.
