Key takeaways
- The UK government has outlined its proposals for regulating cryptoassets and promoting the adoption of distributed ledger technology (DLT) in capital markets.
- The FCA has launched a crypto roadmap that includes plans for policy publications on stablecoins, covering issuance, custody, backing assets and redemption.
- The government will also pilot a digital Gilt instrument to explore how DLT can enhance the debt issuance process.
- Market participants should monitor developments closely to understand how these changes will affect their business and how best to respond to them.
The Treasury’s plans
Tulip Siddiq, Economic Secretary to the Treasury, recently spoke at the Tokenisation Summit, detailing the government’s crypto regulation plans, which focus on the following areas:
Cryptoasset regulation
- The government has updated the timetable for regulating cryptoassets in financial services.
- Proposals by the previous government aimed to introduce new regulated activities for cryptoassets.
- However, the UK General Election caused delays to the implementation of these proposals.
- The new UK government has now confirmed it will implement the proposals in full, with the following amendments:
- Stablecoin regulation will now be introduced alongside the broader regulatory regime for cryptoassets, rather than in a two-stage process.
- Stablecoins will not be brought into UK payment regulation.
- The government will eliminate legal uncertainty surrounding cryptoasset staking services, meaning they will not qualify as a collective investment scheme under financial services law.
- In 2025, the government will consult firms on the draft legal provisions for the cryptoasset regime, including stablecoins1.
