The UK Labor Party, which came to power earlier this year with a historic landslide victory, is preparing to introduce a comprehensive regulatory framework for cryptocurrencies, stablecoins and staking services. This new framework, set for 2025, aims to unify existing fragmented measures and provide a clear path for the UK to establish itself as a global hub for digital assets.
Economic Secretary to the Treasury Tulip Siddiq outlined the new administration’s vision at the City & Financial Global Tokenization Summit in London, according to a recent report. Bloomberg report.
The upcoming legislation aims to align the UK’s crypto landscape with global developments, including the EU’s comprehensive Markets in Crypto Assets (MiCA) regulations.
Unlike the previous Conservative government’s piecemeal approach, Keir Starmer’s Labor administration plans to deliver a comprehensive regulatory regime in a single phase. Siddiq said: “Doing everything in one phase is simpler and simply makes more sense,” highlighting the government’s intention to streamline the process and remove long-standing legal ambiguities surrounding stablecoins and crypto services. staking.
Stablecoins will no longer be governed by existing regulations on payment services, with new rules tailored to their unique use cases and characteristics. The government also aims to exclude staking services from the classification of collective investment schemes, alleviating industry concerns over increased oversight.
Be competitive on a global scale
The push for regulation reflects the UK’s efforts to remain competitive with the United States, where President-elect Donald Trump has taken a pro-crypto stance, and the European Union, which has already implemented MiCA. Siddiq acknowledged that delays in establishing a regulatory framework have pushed crypto companies towards more favorable jurisdictions.
Earlier this year, the Labor Party published a financial services plan highlighting the UK’s potential as a tokenization hub. This vision includes advancing the legal framework around the tokenization of financial and real assets on the blockchain. The Bank of England’s central bank digital currency (CBDC), currently in the design phase – the digital pound – is another cornerstone of the government’s strategy, with implementation decisions expected in 2025-26 .
Crypto adoption in the UK has exploded, with around 2.5 million citizens owning digital assets. Market activity reached $170 billion in annual volume, supported by more than $1.9 billion in venture capital investments in 2022. The planned regulations aim to balance consumer protection and financial stability while by fostering innovation in blockchain and decentralized finance.
Industry players hope that the new government will build on the foundations laid by the previous administration, including public consultations on the regulation of stablecoins and financial promotions. Crypto UK, a leading lobby group, has encouraged the government to prioritize clarity and capitalize on the sector’s potential to drive job creation and economic growth.
Labor wins election and wants to make UK a ‘world leader in tokenization’, but questions remain
Labor dethroned the Conservatives, but apart from tokenization, the new UK Prime Minister, Keir Starmer, has remained silent on crypto.
