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- 1 UK government stated that it plans to continue working with financial services and technology to establish legislation.
- 2 It aims to pave the way for digital securities, as UK government’s objective is to make the UK a hub for the crypto industry.
- 3 The government will increase its efforts to frame the desired legislation and set of rules that will be applicable to crypto space.
The U.K. government has recently announced that it will continue to work with the financial services and technology industries to frame or create the legislation that is required to regulate digital securities and will facilitate seamless transactions in crypto assets. The objective of the UK government is to become a hub for the crypto industry.
U.K. Government’s Objective to Become Crypto Hub
The government has recently announced a Digital Securities Sandbox (DSS), which respondents accepted positively. This Digital Securities Sandbox would give companies the chance to test new offerings with actual customers while regulatory agencies supervise them.
In the whole year 2023, the regulation of the digital asset sector has dominated a host of regions. Almost all the major countries are seeking to firmly build their position in the growing industry of cryptocurrencies.
The U.K. government set its goal to become a hub for cryptocurrencies in 2022, and since then it has been making efforts to achieve its goal and will continue to do so in 2024 as well.
Actions of the Government
The Bank of England and its Financial Conduct Authority (FCA) will oversee the DSS Project. Draft legislation has officially been published recently, on December 19, 2023. This draft will allow businesses to test the DLT (Distributed Ledger Technology). It powers crypto to digitize or tokenize traditional securities and represent them on a blockchain.
The government said its objective is to tokenize other traditional assets as well, such as debt, equity, and money market instruments. All these assets will be within the scope of the sandbox.
The proposal by the government includes stricter rules for exchanges, custodians that store cryptocurrencies and assets on behalf of clients, and crypto lending companies.
The U.K. government aims to increase transparency and trust in the crypto assets and companies involved in the mining and staking of cryptocurrencies. The regulations are also expected to bring stability to the trading and pricing of cryptocurrencies.
It is not clear yet how exactly regulations and legislation will impact the prices, users, and companies involved in cryptocurrencies.
Similar Legislation in Other Countries
Other countries, such as the U.S., Italy, and the UAE, are also working on building regulations and legislation around crypto currencies. The EU has set out a clear framework for digital assets with its MiCA (Markets in Crypto-Assets) regulations, including licensing for crypto firms.
The U.K. government is ahead of the most other countries and is expected to introduce laws for the crypto industry before parliament by 2024.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
