TL;DR
- The UK government developed a new plan for crypto legislation, with the Treasury implementing the laws as soon as 2024.
- The legislation is a positive sign of crypto adoption in society but can affect users who like the privacy and freedom aligned with cryptocurrencies.
UK to Regulate Crypto in 2024
The UK government has announced more rigorous regulations for crypto asset operations, aligning them with conventional financial services standards.
The UK Government will introduce these new laws in 2024. That follows a consultation initiated earlier this year.
Under the new plans, exchanges must provide comprehensive criteria regarding admission standards and disclosure specifics for token creators.
“We aim to transform the UK into a hub where crypto asset companies can get clear directives for growth and innovation and where consumers feel secure using these platforms. The UK is a prime location to establish and expand a crypto asset venture.”
City Minister Andrew Griffith
How Will The Rules Work?
The government plans to roll out these regulations in stages. They will initially concentrate on stablecoins, which are linked to actual currency and used for purchases.
Subsequently, they’ll address additional cryptocurrency concerns, as detailed in two official papers.
Back in February, they sought feedback on these proposals. A multitude of companies and individuals provided insights, refining the proposed regulations.
The primary emphasis is on using stablecoins for transactions and their issuance and storage within the UK.
Under these regulations, the Bank of England and two other prominent financial institutions will oversee specific stablecoins.
The objective is to ensure that users can safely transact with these stablecoins, guaranteeing stability and fairness.
The Treasury also discussed various facets of digital currencies, including their trading practices, security measures, and lending protocols.
Furthermore, the government stated that they don’t classify cryptocurrencies without tangible backing as speculative ventures.
This perspective aligns with the EU and UAE, which is on track to become a major crypto hub.
UK Crypto Users Will Only Have To Win – Or Will They?
The UK government’s decision to tighten regulations on cryptoasset activities signals a transformative phase in the country’s crypto landscape. That will, of course, affect the end user.
First and foremost, for consumers, this move can be seen as a measure of added security.
By placing crypto operations under the same regulatory standards as traditional financial, users can expect a high degree of protection.
Hence, scams, frauds, and misconduct might decrease as businesses adhere to more stringent criteria.
With exchanges mandated to provide detailed criteria for token issuance, end users can anticipate a more transparent trading environment.
When new tokens are issued, consumers can access detailed information about the issuer, reducing the risk of scamming.
However, while these measures increase safety, they may also introduce barriers or delays.
Users might face longer wait times for account verifications, as companies would now operate under more strict checks.
On a more positive note, a regulated environment could lead to a surge in institutional participation, enhancing the market’s liquidity.
That can result in a broader acceptance of cryptocurrencies in everyday transactions, benefiting end users wishing to diversify their options.
Do you think this pack of laws is a positive sign for the crypto industry?
Julia Zakharchuk
Julia is a professional crypto and blockchain writer known for her insightful YouTube channel "MoneyFest." She showcases her dynamic presentation skills as a host and moderator at blockchain conferences. Julia drives also business development at ChainUp and advises UNITBOX, an innovative NFT renting protocol. With her exceptional expertise, Julia is a highly valued industry contributor and is set to make a lasting impact. We at Coinweb are lucky to have her on board.
