Newsroom International

The UK Aiming for Robust Cryptocurrency Regulation by 2024

18 April 2023 Written by Staff Writer

Over the next year, the United Kingdom is expected to implement specific legislation aimed at regulating the rapidly growing cryptocurrency sector. This news comes from a recent interview with Andrew Griffith, Economic Secretary to the U.K. Treasury, as the government seeks to establish itself as a global hub for digital asset technology.

In February, the U.K. government laid out initial plans for cryptocurrency regulation and solicited public feedback. The consultation period, set to conclude on April 30, has attracted the attention of several crypto-based companies seeking regulatory clarity. Griffith believes that new rules governing the industry could be enforced within the next 12 months.

Following Britain's exit from the European Union, Griffith stated that the country had regained control of its regulatory landscape, which would allow for agile and proportionate policy development. He emphasized that the U.K. should capitalize on this opportunity, particularly as global competition for hosting cryptocurrency businesses increases.

Countries such as Dubai and Singapore have been actively promoting their jurisdictions as crypto-friendly in order to attract investment and encourage the establishment of digital asset firms. In contrast, the United States has adopted a stringent approach to cryptocurrency regulation, with regulators intensifying enforcement actions against companies in the sector.

Last year, Rishi Sunak, the former U.K. Finance Minister and current Prime Minister, announced his intentions to transform Britain into a "global hub for cryptoasset technology." This ambition resonates with several crypto companies that have been urging governments to develop clear operational frameworks for the industry. In the U.S., for example, the Securities and Exchange Commission has been applying existing securities regulations to target digital asset firms.

According to Griffith, the U.K. will pursue a combination of current and new regulations in order to govern the crypto industry effectively. The goal is to ensure that the same assets and transactions are regulated uniformly while also exploiting unique opportunities presented by the emerging market.

Griffith cited the Financial Services and Markets Bill, which is currently progressing through Parliament, as an example of upcoming legislation that already addresses some aspects of cryptocurrency regulation. This specific law, not yet enacted, seeks to incorporate asset-backed stablecoins under regulatory oversight.

Stablecoins, a category of digital currency, are designed to mirror the value of real-world assets, such as the U.S. dollar. Often, they are backed by tangible assets, including bonds and fiat currencies. Distributed ledger technology, also known as blockchain, allows for the maintenance of multiple transaction records that are not controlled by a single entity. Instead, these records are updated simultaneously by all parties involved in a transaction, ensuring accuracy and transparency.

By implementing targeted legislation and nurturing a supportive regulatory environment, the U.K. aims to establish itself as a global leader in the cryptocurrency sector. As the consultation period comes to an end and new laws are introduced, the country's position as a hub for digital asset technology will likely strengthen.