UK could see crypto regulation in 12 months, says lawmaker

Britain could introduce specific laws aimed at regulating the cryptocurrency industry in the next 12 months, a top lawmaker told CNBC.

The UK government laid out plans to regulate crypto assets in February and opened its proposals to consultation. The consultation period ends on 30 April.

Andrew Griffith, economic secretary for the UK Treasury, said in an interview on Monday that specific crypto regulation could come into force within a year or so.

“We’ve regained control of our rulebook, something the UK hasn’t had for decades,” Griffith told CNBC, referring to Britain’s exit from the European Union.

“So we have the opportunity to move in an agile and proportionate way. And I’m definitely keen that we make the most of that opportunity.”

Jurisdictions around the world from Dubai to Singapore have sought to position themselves as crypto-friendly places to encourage firms to establish themselves there.

The US, meanwhile, has taken a hard line against cryptocurrency firms with its regulators stepping up enforcement actions against companies.

However, the UK wants to position itself as a place for crypto firms to come. Last year, Rishi Sunak, then UK Chancellor of the Exchequer and now Prime Minister, said his ambition was to make the UK a “global hub for crypto-asset technology”.

Crypto companies told CNBC that they want clarity around rules and are pushing governments to come up with frameworks for them to operate. In the US, the Securities and Exchange Commission has used existing securities rules to target cryptocurrency firms.

Griffith said the UK’s regulatory approach would mix both existing and new.

“Where possible, we want to see the same asset, the same transaction regulated in the same way. But there are some additional opportunities in the crypto-asset or distributed ledger space, and we want to take advantage of that,” Griffith told CNBC.

The lawmaker pointed to the Financial Services and Markets Bill, which is currently working its way through parliament, as an example of where upcoming legislation already includes some provisions on cryptocurrency. The specific law, which is not yet in force, aims to bring asset-backed stablecoins into the regulatory fold.

Stablecoins are 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 or fiat currencies.

Distributed ledger technology, sometimes called blockchain, refers to multiple records of transactions that are not owned by a single entity. They can be shared and updated simultaneously to ensure accuracy for all parties involved in a transaction.