The U.K. is preparing to introduce new legislation for cryptocurrencies and stablecoins by June or July 2024, U.K. Economy Minister Bim Afolami said. Speaking at the Innovate Finance Global Summit on Monday, Afolami said the government is working quickly on legislation to put final proposals for a regulatory regime for cryptocurrencies in place.

UK to Introduce New Cryptocurrency and Stablecoin Regulations by Mid-2024

Speaking at the Innovate Finance Global Summit, Afolami said, “We are now working intensively to finalize legislation to put our final recommendations for the regulatory regime in place.”

The announcement comes after the UK passed the Financial Services and Markets Act in June 2023, which enables cryptocurrencies to be considered regulated financial activities.

The Economy Secretary added: “Once live, a range of crypto-asset activities, including operating exchanges and hosting customer assets, will come under regulation for the first time.”

The government has expressed its intention to make the UK a preferred destination for the crypto industry and plans to bring related activities under the jurisdiction of the Financial Conduct Authority (FCA). Meanwhile, new regulations regarding the promotion of digital assets have come into force in the country.

Duncan Ash, head of strategy at blockchain protection firm Coincover, commented in a Finance Magnates op-ed, “While the specifics of the new regulations and how they will be enforced remain to be seen, the future of cryptocurrencies will inevitably be subject to stricter regulation and oversight.”

Winds of Regulatory Change

Under the new regulations, a range of crypto-asset activities will come under regulation for the first time, including the operation of exchanges, custodial services, and other related activities.The FCA will soon be consulting on an authorization regime for crypto firms, and the government also plans to develop equivalents for overseas firms.

The UK government has taken a phased approach to introducing cryptocurrency regulation, with fiat-backed stablecoin legislation a top priority. As the government brings activities such as lending and trading under traditional financial regulation, other areas such as algorithmic stablecoins will follow.

Despite the government's efforts to create a cryptocurrency-friendly environment, the cryptocurrency industry in the UK faces a number of challenges. Cryptocurrency companies have complained about delays and poor feedback from the FCA, while recently introduced rules restricting cryptocurrency promotions have led to a number of high-profile firms cutting off UK services altogether. According to February 2024 data, the market watchdog issued more than 450 alerts about illegal cryptocurrency ads in just three months.

In Europe, Poland is also set to regulate cryptocurrencies later this year. Under the new law, the local financial regulator, KNF, will be allowed to block cryptocurrencies from companies and users for 96 hours on mere suspicion of irregular transactions.