The UK Government has announced that they are in the process of developing new stablecoin and crypto regulations to ensure that crypto mass adoption of these assets in The United Kingdom.
New regulations regarding stablecoin and crypto are a part of the plan from The Prime Minister of The United Kingdom, Rishi Sunak, who said that they want crypto mass adoption in the country where the plan was originally supposed to be developed in 2022 but has been long paused since it shown very little progress.
UK Preparing Crypto Regulations
Plans around establishing new stablecoin and crypto regulations were mentioned when The Economic Secretary to the Treasury Bim Afolami was speaking at a Coinbase-hosted event on February 19th, 2024.
These regulations have not been detailed yet but some of the things mentioned is how these regulations will create a supportive environment for crypto investors in The UK so that adoption can grow and The UK can compete with other countries regarding crypto and blockchain innovations.
Two of the regulations mentioned were regulations regarding stablecoins and regulations regarding crypto staking.
Stablecoin has been a quintessential part of crypto adoption because it has alleviated boundaries of cross countries regulations and banking so that people can send money abroad faster and can hold other fiat rather than their own country’s a lot easier.
Also, stablecoin plays a huge role in crypto because most investors, especially new ones, need to purchase crypto through stablecoins. When new users deposit their fiat into an exchange, they will receive stablecoins, which is why stablecoins plays a huge role in crypto.
Another thing to focus on is staking, especially since innovations such as liquid staking are now leading the growing adoption of crypto through DeFi.
Again, through staking, investors have an alternative option when storing their money for profit rather than using conventional banking products like deposit accounts and bonds.
Through staking, investors can earn passive income even more than the average yield of banking products, which is why it plays a huge role in the crypto space.
Both of those things are probably the reason why The UK government is focusing on stablecoins and crypto staking regulations.
Current conditions of these regulations are still in the development stage, but it is said that the regulation will be published in the next 6 months.
The sudden regulation development can be seen as the government potentially preparing for the upcoming predicted bull run of 2025.
Most countries right now are preparing for their own crypto regulations, especially tax wise, in order to not miss the chance to capitalise on the bull market.
Current State of Crypto in The World
Aside from The UK, other countries are currently also developing new regulations to accommodate a safer way of transacting both for crypto and stablecoins.
Most of them are establishing new regulations regarding stablecoins and stablecoin issuer to ensure that investors are kept in safe hands.
The EU or The European Union is establishing regulations around stablecoins under the market in crypto assets regulations or MiCA.
Singapore and HongKong are also preparing for tighter but more accommodating crypto regulations so that investors can transact safely and developers can create new projects in a safer and more legal manner.
Dubai is also preparing for bigger adoption of crypto and stablecoins where as of right now, the main goal of the country is to become the crypto capital of the world.
But competition is still strong, as America and countries in South America are preparing for mass crypto adoption as well, welcoming new investors and crypto related companies to operate in their countries.
Most of these new regulations are circulated around surveillance and taxes so that the government could still watch over every transaction and capitalise on the growing trend of crypto.
This is understandable from a government point of view because the government will not let a decentralised technology bring down their control over people.
But at the same time, from a decentralised enthusiast point of view, tighter regulations could taint the main goal of crypto in the first place, which was decentralisation, transparency and no barrier to entry.
So, in order to regulate the market while still keeping adoption high, governments around the world need to formulate regulations that can benefit both parties.
The outcome of all of this can only be seen after it has been published, so as of right now, there are no speculations yet on which countries will still support crypto and which countries will stop supporting, especially in the predicted bull market of 2025.
