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Officials from the United Kingdom have confirmed that the government is preparing to introduce a new regulatory framework for the cryptocurrency industry, including regulations for stablecoins, by early 2025. The announcement follows a delay in the process due to the recent general elections, which saw Keir Starmer from the Labour Party become Prime Minister.
Tulip Siddiq, the economic secretary to the UK Treasury and City Minister, clarified that stablecoins would not be regulated under the current Payment Services Act. Instead, stablecoins—digital currencies pegged to fiat money—will be included in the new regulatory framework that is expected to be finalized in 2025.
Siddiq emphasized the importance of consolidating the regulations into a single phase, stating, “Doing everything in a single phase is simpler and it just makes more sense.” This statement was made during her appearance at the City & Financial Global’s Tokenisation Summit in London on November 21, 2023, as reported by Bloomberg.
The delay in the UK’s crypto regulatory progress contrasts with the European Union, which has already implemented its Markets in Crypto-Assets (MiCA) regulations in 2023. These regulations aim to enhance consumer protection and financial stability across the EU. Countries like France, Switzerland, and Liechtenstein have also already established specific regulations for cryptocurrencies.
Growing Crypto Market in the UK
The push for regulations in the UK is particularly important given the rapid expansion of the cryptocurrency market within the country. As of recent estimates, approximately 2.5 million adults in the UK—about 5% of the population—own cryptocurrency. Additionally, the market has grown significantly, with a market size of around $170 billion and daily trading volumes reaching approximately $8.5 billion.
The crypto industry in the UK has also seen significant venture capital investment, with over $1.9 billion in funding directed towards crypto and blockchain startups in 2022.
Furthermore, the UK has been exploring the potential development of a Central Bank Digital Currency (CBDC), referred to as the Digital Pound. This initiative is currently in the design phase, with ongoing discussions between the Bank of England and the wider industry. The development of CBDC would further solidify the UK’s position in the evolving digital economy.
