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The UK may introduce specific legislation aimed at regulating the cryptocurrency industry within the next 12 months, a top lawmaker told CNBC.
The UK government formulated a plan to regulate crypto assets in February and published its proposal for consultation. The consultation period is until April 30th.
UK Treasury Secretary for Economy Andrew Griffiths said in an interview on Monday that certain crypto regulations could come into force within a year or so.
Referring to Britain’s exit from the European Union, Griffiths told CNBC, “We now have control over our rulebook, not something the UK has had for decades.
“So we have the ability to move in an agile and balanced way, and I definitely want to make the most of that opportunity.”
Jurisdictions around the world, from Dubai to Singapore, are seeking to establish themselves as crypto-friendly destinations to encourage businesses to set up shop there.
Meanwhile, the United States has taken a tough stance on cryptocurrency companies, with regulators stepping up enforcement action against them.
However, the UK wants to position itself as a place for crypto companies to enter. Last year, UK Finance Minister and now Prime Minister Rishi Sunak said his ambition is to make the UK a “global hub for cryptocurrency technology.”
As the UK aims to become a “global hub” for cryptocurrencies, it is looking to introduce legislation to regulate the cryptocurrency industry.
Vael Arvaye | In Stock | Getty Images
Crypto companies told CNBC that they want to clarify the rules and are asking the government to come up with a framework to operate. In the United States, the Securities and Exchange Commission is using existing securities rules to target cryptocurrency companies.
Griffiths said the UK’s regulatory approach would mix both existing and new regulations.
“As much as possible, we want the same assets, the same transactions, to be regulated in the same way. We are,” Griffiths told CNBC.
Lawmakers cited the Financial Services and Markets Bill currently passing through Congress as an example of an upcoming law that already includes several provisions on cryptocurrencies. That particular law, which has not yet come into force, is intended to bring asset-backed stablecoins into the realm of regulation.
A stablecoin is a type of cryptocurrency designed to mirror real-world assets such as the US dollar. They are often backed by real assets such as bonds and fiat currencies.
Distributed ledger technology, sometimes called blockchain, refers to multiple records of transactions that are not owned by a single entity. They may be shared and updated simultaneously to ensure accuracy for all parties involved in the transaction.