The United Kingdom has set a new crypto regulation which is expected to start in July

The Economic Secretary of the UK, Bim Afolami says that the UK government plans to introduce new rules for cryptocurrencies and stablecoins by the end of 2024, by June or July. The UK government representative, Bim Afolami said at Innovate Finance Global Summit on Monday that new legislation for cryptocurrency is due for the Parliament consideration soon.

UK Will Apply New Crypto and Stablecoin Regulation by the Mid-year of 2024.

"We are moving swiftly by introducing the legislations that will give effect to our proposals for the framework," Afolami remarked at the Innovate Finance Global Summit.

The statement follows the UK's approval of the Financial Services and Markets Act 2023 in June where cryptocurrency is now a regulated activity.

"Once it goes live, a whole host of crypto asset activities, including operating an exchange, taking custody of customers' assets and other things, will come within the regulatory perimeter for the first time," the Economic Secretary added.

The UK government declared that it is trying to attract crypto businesses to establish a favorable ground to regulate crypto and place them under the supervision of the Financial Conduct Authority (FCA). On the flip side, new legal limitations concerning the commercialization of digital currencies have come into force in the nation.

"While it remains to be seen exactly what new regulation will look like and how it will be enforced, it's unavoidable that the future of crypto lies within far more regulated and supervised parameters," Duncan Ash, Head of Strategy at blockchain protection firm Coincover, wrote in an op-ed for Finance Magnates.

Regulatory Winds of Change

For the first time, the new laws will encompass a wide variety of crypto asset activities, including exchange operations, custodial services, and other associated activities. The FCA will shortly advise on a licensing framework for cryptocurrency companies, and the government intends to develop equivalency standards for international enterprises.

The UK government uses the tiered approach in implementing the cryptocurrency rule, which aims to make law decided on the fiat-backed stablecoins an immediate concern. Another field like algorithmic stablecoins will trace them once the government puts the lending and trading within the traditional financial regulation shadows as well.

The government continues to try and create an environment that is favorable for cryptos, however, the UK business faces a few inhibitions still. Companies working with cryptocurrencies have protested about blocked developments by the FCA and new laws that also forbid cryptocurrency announcements have caused some big corporations to cease to be active in the UK. According to statistics from February 2024, the market watchdog sent out over 450 notifications against illicit cryptocurrency marketing in just three months.

In Europe, Poland is also planning to regulate cryptocurrencies later this year. According to new legislation, the local financial supervisory authority, KNF, will be able to block organizations' and users' cryptocurrency for 96 hours if there is even a remote suspicion of unregulated trade.

Notwithstanding the government's trying to establish a favorable crypto business environment, the UK venture was faced with some of the challenges. The crypto companies have complained about lengthy and insufficient interaction from FCA, plus the new legislation that bans advertising has forced some known companies to cease operations in the UK. Through the data of February 2024, given by a market overseer, more than 450 notices were sent to marketing companies conducting unlawful activities with cryptocurrency in 3 months.