The British government is said to be preparing legislation regarding stablecoins, crypto staking, exchange, and custody services.

As per Economic Secretary Bim Afolami, the government is making swift progress towards finalizing the necessary legislation to establish a regulatory framework. This development was highlighted during his speech at the Innovate Finance Global Summit, as reported by CoinDesk.

Afolami noted that once the legislation is in place, various activities involving crypto assets, such as running exchanges and safeguarding customers’ assets, will come under regulatory oversight for the first time. The anticipated timeline for this implementation is around June or July.

In October, the British government announced its plans to bring fiat-backed stablecoins under the supervision of key regulatory bodies such as the Bank of England, Financial Conduct Authority, and Payment Systems Regulator. This step is aimed at mitigating potential risks related to customer harm and addressing concerns regarding conduct, prudential matters, and financial stability associated with the use of stablecoins in payments.

In February last year, the U.K. treasury introduced draft regulations for the crypto sector, signaling that digital asset firms would be subject to regulation akin to traditional financial institutions. The government’s goal is to find a middle ground between regulating the crypto industry and positioning Great Britain as a leading global hub for cryptocurrencies.

Despite these initiatives, a recent report from the Financial Action Task Force (FATF) highlighted that less than 30% of jurisdictions worldwide have implemented regulations for the crypto sector. T. Raja Kumar, the head of FATF, likened virtual assets to water, stressing that they tend to flow towards less regulated jurisdictions, potentially attracting illicit activities. Strengthening the international regulatory framework is vital to curb regulatory loopholes and ensure a resilient ecosystem.

Furthermore, a report from the FBI’s Internet Crime Complaint Center (IC3) pointed out a surge in complaints related to cryptocurrency scams in 2023. Americans lodged over 43,000 complaints, leading to losses totaling $3.9 billion due to fraudulent schemes and scams involving cryptocurrencies, marking a 53% increase from the previous year.