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The UK government has legislative plans prepared covering cryptocurrencies and Open Finance, according to Bim Afolami, the Economic Secretary to the Treasury.

Speaking at the Innovate Finance Global Summit (IFGS) this week, Afolami detailed that the government is planning legislation in June or July on regulations of crypto staking, exchange and custody.

Bim Afolami – Source: UK Parliament

This falls in line with previously outlined political-economic objectives and principles held by Rishi Sunak, UK Prime Minister. Sunak has spoken openly in the past about his ambitions to make the UK a crypto hub.

Regulatory developments so far include the Financial Services and Markets Act 2023, which put stablecoins and other cryptocurrencies under the regulatory remit of the Financial Conduct Authority (FCA). 

Calls for crypto to be treated as a form of gambling have also been resisted by the government. This view was exposed by Andrew Griffith MP, the former Economic Secretary to the Treasury.

Quorted by CoinDesk, Afolami explained at IGFS: “We are now working at pace to deliver the legislation to put our final proposals for our regime in place. 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 governing Conservative Party is targeting a ‘Digital Britain’, as Lisa Cameron MP put it on a panel at Pay360 last month. Legislative progress will be needed if this dream is to become reality.

However, cryptocurrencies are not the only area of interest. Artificial Intelligence and Open Banking are also on the government’s agenda, with the former being one of the main target areas of a £500m government investment plan mapped out in the Autumn Budget last year.

Open Banking was the subject of the Future of Payments Review last year, which outlined that although the tech has significant potential to improve the British economy, the country must fill consumer protection gaps to achieve this.

On the latter topic, Afolami detailed broader plans to govern Open Finance, with the government planning to set up a task force examining this area within the same timeframe as its crypto legislation. However, he added that the government is not the only actor with influence on this, calling on the industry to participate in and engage with the task force.

“Government can only do so much. I am not from the school of thought that thinks great innovation comes from people like me, it comes from you,” he said, according to Finextra.

The main obstacle to the Conservative’s plans may be an election. Rumours suggest that a UK general election – which can be called no later than January 2025 – will likely be held in October. 

By pushing legislation through by July, the Conservatives, which are performing poorly in opinion polls, will likely be hoping to get any remaining political changes over the line before potential change of government. However, there is still the slim possibility of an election being called prior, depending on changes in circumstances.