As the cryptocurrency industry in the United States hopes for more crypto-friendly regulations under the influence of Donald Trump, the UK government has laid out its strategy for regulating this sector to enhance its dominance in the global cryptocurrency market.
The UK began its efforts of crypto regulation in 2022, with ambitions to establish itself as a global hub for digital currencies. Political shifts, however, delayed these plans. As of 2024, these regulatory initiatives are being revisited and updated to keep pace with global developments and ensure the UK remains a competitive force in the international crypto market.
In September 2024, the UK government rolled out the Property Bill, an important legislative update aimed at regulating digital assets more comprehensively. This new bill seeks to clarify the legal nature of non-fungible tokens (NFTs), cryptocurrencies, and carbon credits by introducing a new category of property in UK law, essentially classifying these digital assets as “things.”
Labour MP Heidi Alexander, the Minister of State, emphasised the importance of updating laws to keep up with technological advancements, stating that this bill is crucial for maintaining the UK’s leadership in the global cryptocurrency market and clarifying complex property ownership issues.
The government also highlighted that this legislation is designed to offer stronger legal protections for individuals and businesses against fraud and scams. Additionally, it aims to assist judges in navigating complex legal scenarios where digital assets are involved, such as dividing assets during divorce settlements.
The British government is preparing ambitious laws to regulate cryptocurrencies, hoping to reassure companies and compete with the United States, which is increasingly seducing the sector under the leadership of Donald Trump. The Treasury is preparing two legislative proposals: one for stablecoins, tokens pegged to more stable assets like the US dollar, and another to create an exemption for staking services, allowing them to avoid current financial regulations.
The new laws will give the Financial Conduct Authority (FCA) consultative powers on the rules surrounding stablecoins (digital tokens tied to the value of less volatile traditional assets such as the US dollar). At the same time, staking, where investors lock up their tokens to support the blockchain and earn rewards, will be reclassified to prevent it from being associated with a collective investment scheme, thus avoiding stricter regulation.
According to a spokesperson for the FCA, the regulator plans to publish a roadmap for its plans to regulate the cryptocurrency sector “soon.” However, the exact timeline for the consultation on stablecoins and broader regulation of the sector is yet to be revealed.
The government also plans to provide an update on the development of the digital securities sandbox. This initiative is run by the FCA and the Bank of England as a real-world testing ground for blockchain innovations, helping to refine and demonstrate new technologies under controlled conditions.
The new legislative framework aims to strengthen Britain’s competitiveness against the United States, where Trump has promised to make the country a global hub for cryptocurrencies. His agenda includes creating a Bitcoin reserve and aiming for any future Bitcoin to be mined in the United States, a tempting proposition for UK-based crypto startups.
As the UK continues to refine its regulatory framework for cryptocurrencies, investors looking to capitalise on these positive developments should consider platforms like OANDA Crypto. Known for its robust trading platform and comprehensive market analysis tools, OANDA provides a secure environment for trading cryptocurrencies amidst the evolving legal landscape.
These new regulations, initially planned earlier, have been delayed by political changes. However, the UK must hurry to keep its place among the countries welcoming to cryptocurrencies, especially as the European Union finalises its own global rules.
The UK still has a unique opportunity to take the lead, provided it acts quickly. In a constantly evolving market, clear and proactive regulation will be essential to attract and retain businesses in the country, ensuring its position as a crypto leader in Europe.
The information provided in this article was provided by one of our third party content providers and is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are inherently risky and subject to market volatility. Readers are encouraged to conduct their own thorough research and consult with a qualified financial advisor before making any investment decisions. Never invest more than you can afford to lose.
