UK to Unveil Long-Awaited Crypto, Stablecoin Rules Early in 2025

(Bloomberg) -- Keir Starmer’s government will draft a regulatory framework to oversee the crypto sector early next year, a senior minister said, as the UK tries to keep pace with developments in the sector in the US and Europe.

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Rules on stablecoins — cryptocurrencies tied to the value of more stable assets like the US dollar — and on so-called staking services will be part of a single overarching regime for cryptoassets, Economic Secretary to the Treasury Tulip Siddiq said at a conference in London on Thursday. Legislation on those two areas was previously expected to be passed by the previous Conservative government in the summer, but the general election intervened.

“Doing everything in a single phase is simpler and it just makes more sense,” said Siddiq, whose Labour Party came to power in a landslide in the July vote.

Under the new government’s plans, stablecoins would no longer be considered under the UK’s existing payments services regulation because that would not appropriate based on their “current use cases,” she said.

The UK is seeking to combat the lure of Donald Trump’s administration to crypto businesses in the US, where the President-elect has sought to woo the industry. Lack of movement on legislation has made crypto companies wary of dedicating resources to the UK, particularly as the European Union’s wide-ranging Markets in Cryptoassets regulation is also set to be implemented by the end of the year.

The industry is seeking a carve out for staking — where investors lock up tokens to help keep a blockchain operating in return for a small yield — that would avoid it being considered a collective investment scheme, with the additional scrutiny that incurs. The industry sees staking as the provision of tech services.

“For me, it doesn’t make sense for staking services to have this treatment,” Siddiq said at City & Financial Global’s Tokenisation Summit. “The government intends to proceed with removing this legal uncertainty accordingly.”

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