UK government to introduce legislation on stablecoins, staking: report

British officials are reportedly working on a plan to regulate stablecoins and exempt staking services, aiming to strengthen the country’s appeal in the face of regulatory changes in the US.

The British government plans to introduce crypto regulations by December in a bid to protect firms tempted by the pro-crypto stance in Trump’s US. The Undersecretariat of Treasury is expected to introduce two pieces of legislation that focus specifically on stablecoins and adjust existing regulations to exclude crypto staking. Some financial rules apply, Bloomberg has learned, citing sources familiar with the matter.

The expected legislation will allow the Financial Conduct Authority, the country’s financial regulator, to draft rules regarding stablecoins. The approach also aims to redefine staking outside the purview of traditional investment schemes and isolate it from additional scrutiny, sources say.

While an exact timeline remains unclear, insiders say the FCA will soon publish a roadmap detailing its phased approach to regulating stablecoins and other crypto assets. Additional updates are expected in the UK’s digital securities sandbox, a joint blockchain testing initiative with the Bank of England.

In October, Circle’s head of global policy, Dante Disparte, suggested the UK would legislate on stablecoins within a few months, highlighting the industry’s recent $170 billion market capitalization. The same month, a proposal to recognize digital assets as personal property was introduced to Parliament, with Justice Minister Heidi Alexander highlighting the need to protect digital assets from fraud and simplify ownership disputes.

The former Conservative government led by Rishi Sunak outlined plans to make the UK a global leader in crypto, including regulatory oversight of stablecoins. However, since the transition to the current Labor government, there has been less emphasis on crypto regulation.