The United Kingdom’s Treasury is set to unveil a regulatory framework for cryptocurrencies and stablecoins by July, aiming to boost local innovation in the digital assets and blockchain sectors.
This announcement was made by the U.K.’s economic secretary to the Treasury, Bim Afolami, at the Innovate Finance Global Summit (IFGS) 2024.
During his address, Afolami emphasized the strategic importance of introducing crypto regulations to maintain the U.K.’s competitiveness on the global stage.
He stated, “Speaking of true change, I know that the cornerstone of our position as a world leader in fintech is the delivery of our regulatory regime for crypto assets and stablecoins.”
This framework aims to strike a careful balance between fostering innovation and ensuring consumer protection.
The proposed regulations will encompass a variety of crypto asset activities, including exchange operations and custodianship of customer assets.
These measures are expected to bring these activities under regulatory oversight for the first time.
“Once it goes live, a whole host of crypto asset activities, including operating in exchange, taking custody of customer assets and other things, will come within the regulator perimeter for the first time,” Afolami added.
In addition to regulatory developments, Afolami announced the creation of an open finance task force at the summit.
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This task force will be responsible for developing recommendations that outline the necessary data sets and commercial incentives to advance the use of open finance in small and medium enterprise (SME) lending.
Significant changes are also forthcoming in the U.K.’s approach to managing crypto assets involved in criminal activities.
Starting April 26, British authorities will have the authority to directly retrieve crypto assets from exchanges and custodian wallet providers, thanks to amendments to the Economic Crime and Corporate Transparency Act 2023.
This amendment enhances the powers of the National Crime Agency, allowing them to confiscate and seize crypto assets linked to suspicious activities without extensive legal hurdles.
While the exact methods of disposing of seized crypto tokens were not detailed, the most common practice involves transferring the tokens to a burn wallet, effectively removing them from circulation.
This new legal and regulatory environment represents a significant step in integrating crypto assets into the U.K.’s financial system, balancing innovation with rigorous oversight.
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