The government has delayed the rollout of a regulatory regime for stablecoins, it has been confirmed.
City minister Tulip Siddiq confirmed that the government’s plan for stablecoin regulation, which had been expected this year, would be rolled into a larger regulatory plan for crypto next year.
“Doing everything in a single phase is simpler, and it just makes more sense,” Siddiq said in a speech yesterday at the UK’s Tokenisation Summit.
However, the delay in establishing a proper regulatory regime for stablecoins has left many in the crypto industry frustrated.
“It was disappointing to hear that the ‘phase 1’ regulatory regime for fiat-backed stablecoins will now be delayed until the rollout of the broader ‘phase 2’ regime for other cryptoassets, for which no concrete timeline was given,” said Mike Ringer, a financial services partner at law firm CMS.
“This is despite the government having said in its consultation response last year that its aim was for ‘phase 2’ secondary legislation to be laid in 2024,” he added.
The speech came as the Financial Conduct Authority’s latest research on consumer attitudes and behaviours towards crypto found that 12 per cent of UK adults now own crypto, up from 10 per cent last year. The average value of crypto held by Brits also increased from £1,595 to £1,842.
The value of bitcoin has spiked following the re-election of Donald Trump to the US presidency, rising 45 per cent in the last month to over £95,000.
In her speech on stablecoins, Siddiq said that the government “does not intend to bring stablecoin into UK payments regulation at this time”.
“Such an approach would place additional regulatory burdens on certain stablecoin activities in a way that would not be proportionate based on the current use cases,” she added.
“And we aim to engage firms on draft legal provisions for the cryptoasset regime including stablecoins as early as possible next year.”
Siddiq also stated that cryptoasset staking services will not be considered a collective investment scheme, one of the key concerns for the industry.
Matthew Long, director of payments and digital assets at the FCA, said: “Our research results highlight the need for clear regulation that supports a safe, competitive, and sustainable crypto sector in the UK. We want to develop a sector that embraces innovation and is underpinned by market integrity and consumer trust.
“We’re committed to working closely with the government, international partners, industry and consumers to help us get the future rules right.”