In her first comments since the July 2024 UK general election, Economic Secretary to the UK Treasury Tulip Siddiq MP delivered a speech at the Tokenization Summit on November 21, 2024, outlining the recently elected UK government’s approach in digital asset regulation. In her speech, Ms Siddiq highlighted the Government’s commitment to driving innovation in the financial services sector, providing an overview of the proposals and timetable for the Government’s planned crypto regulation. Details of his speech are described below.
Regulation of cryptoassets
The government maintains previous proposals to create new regulated activities for cryptoassets, including for operating a cryptoasset trading platform, as well as to extend rules on market abuse. The government plans to work with businesses on draft legal provisions “as early as possible” in 2025 and, as a result, the Financial Conduct Authority (FCA) has published its “Crypto Roadmap” (discussed in more detail below). below). If followed, the roadmap states that the new crypto (and stablecoin, discussed further below) regime would come into effect sometime in 2026.
Stablecoin Regulations
In addition to the above, the government intends to introduce new regulated activities for stablecoins, which will be implemented alongside the broader regulatory regime for cryptoassets. The regulation will ensure that the FCA can manage the risks specific to stablecoins, particularly those associated with the management of supporting assets. However, the government has no plans to introduce stablecoins into UK payments regulation, indicating that this would impose a disproportionate regulatory burden based on current use cases.
Cryptoasset Staking Services
Ms Siddiq addressed the uncertainty over whether crypto-asset staking services constitute a collective investment scheme under the current Financial Services Act, which has impacted the provision of these services in the Kingdom -United. The government intends to address this uncertainty in the next regulatory regime for cryptoassets; staking services will be permitted and the legislation will explicitly state that these services will not be considered collective investment schemes.
“Crypto Roadmap” and FCA Consumer Study
On 26 November 2024, shortly after Ms Siddiq’s speech was made public, the FCA published a ‘Crypto Roadmap’ setting out key dates for the development and introduction of the UK crypto-assets regime. The roadmap presents a series of consultations focusing on different aspects of the future regulatory regime which will be held during 2025 and during the first quarter of 2026, with the final rules being published in 2026. The roadmap has been published at the same time as the FCA’s fifth report. a study on consumer attitudes and behaviors towards crypto-assets. The research shows a continued increase in the number of people in the UK aware of crypto (up to 93%) and continued growth in crypto-asset ownership (up to 12%), highlighting the need for clear regulations.
Next steps
Crypto companies will welcome the clarity of the UK crypto and stablecoin regime, particularly the recognition that UK-centric staking issues will be resolved. Firms wishing to operate under the new UK regimes will need to ensure they allocate resources in 2025 to contribute to the FCA’s proposals and prepare to operate in a potentially regulated environment in the UK in 2026 We will continue to monitor these developments over the coming years. months to come.
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