UK to implement new crypto, stablecoin legislation by Q3

The British government plans to introduce new regulations for stablecoins and other crypto services, such as staking, exchange, and custody, by mid-year.

Economic Secretary Bim Afolami announced this at the Innovate Finance Global Summit this week. He emphasized the rapid progress being made to establish a comprehensive regulatory framework and said the government is quickly advancing the legislation that will finalize the new regulatory proposals. 

Once implemented, this legislation will bring various cryptocurrency operations, including exchanges and custodial services, under regulatory oversight for the first time.

Last year, the U.K. enacted a significant financial markets bill that set the groundwork for treating stablecoins and broader cryptocurrency activities as regulated financial services within the nation. Early last year, the Financial Conduct Authority (FCA) and the Bank of England (BoE) contributed their expertise to shape the regulatory approach to stablecoins. 

The BoE will oversee stablecoin entities that pose systemic risks, while the FCA will regulate the broader cryptocurrency market. In addition to these developments, Afolami revealed in February that supplementary legislation specifically targeting stablecoins was underway and expected to be finalized within the next six months.

The U.K. has slowly improved its crypto adoption with new regulatory and legislative moves. Last week, the London Stock Exchange (LSE) began accepting listing applications for Bitcoin and Ethereum exchange-traded notes (ETNs).

Like Bitcoin ETFs in the U.S., the ETNs will allow institutional investors to gain exposure to the crypto market, with trading set to begin May 28.