UK treasury to introduce regulatory framework for crypto assets and stablecoins in July

The United Kingdom Treasury is set to introduce a regulatory framework for crypto assets and stablecoins by July, with the aim of promoting local innovation in digital assets and blockchain technology. Bim Afolami, the UK’s economic secretary to the Treasury, emphasized the importance of crypto regulations in maintaining global competitiveness in fintech. The regulatory framework seeks to strike a balance between fostering innovation and safeguarding consumers.

The Treasury is currently finalizing proposals for regulations on stablecoins and crypto staking, which are expected to be delivered in June or July. Once implemented, various activities involving crypto assets, such as operating exchanges and taking custody of customer assets, will come under regulatory oversight for the first time.

During the Innovate Finance Global Summit, Afolami also announced the establishment of an open finance task force. This task force will provide specific recommendations on the necessary data sets and commercial incentives to drive the use case for open finance, with a particular focus on SME lending.

In addition to the regulatory framework, the UK is enacting a new law that grants authorities the power to confiscate crypto assets directly from exchanges and custodian wallet providers. This measure, effective from April 26, aims to address economic crime and illicit activities. The law is an amendment to the Economic Crime and Corporate Transparency Act 2023. While the specific method of destroying a crypto token is not specified, the news text mentions that burning the token is a common way to remove it from circulation.