UK Crypto Progress Stalls as Labour Puts Reforms on Hold

• Progress stalls under Labour’s cautious approach to crypto rules.
• EU and US reforms leave UK lagging in global competition.

On July 24, 2024, Cointelegraph reported on regulatory delays under the Labour government. While there are signs of gradual progress, these delays are driving concerns about capital flight, as industry participants warn the UK's slow regulatory pace undermines its global competitiveness. This slowdown is prompting talent and capital to seek more favorable jurisdictions.

The Labour government has shifted its focus to other national priorities instead of cryptocurrency legislation, marking a significant change from the previous Conservative leadership, which sought to make the UK a global hub for digital assets. Critics argue this hesitancy leaves the UK trailing other regions like the European Union, which has implemented its comprehensive Markets in Crypto-Assets (MiCA) framework. In the United States, meanwhile, legislators are also making significant progress on digital asset laws.

Despite the delays, there are signs of incremental progress. An April 2023 consultation from HM Treasury proposed integrating cryptoasset activities into the existing financial services framework. Similarly, Parliament has advanced the Digital Property Etc. Bill, which grants digital assets legal recognition as property. The bill cleared its third reading in the House of Lords and is set for a second reading in the House of Commons on July 19.

Advocacy groups like CryptoUK continue to push for faster regulatory reforms, recommending the recognition of stablecoins as a valid payment method, improved banking access for digital asset firms, and the establishment of clear advertising rules. In contrast, industry voices have sharply criticized the Labour government’s reported plan to liquidate approximately $4 billion in seized Bitcoin. Critics argue this decision undermines confidence in the UK’s commitment to building a strong and sustainable cryptocurrency market.

According to CoinMarketCap data at 15:09 UTC on July 24, Bitcoin (BTC) was trading at $69,506.08, a 1.08% change in the last 24 hours. Tether USDt (USDT) was at $1.000, with a marginal 0.003% change. Meanwhile, XRP had dipped to $0.5251, marking a 1.56% decline in the same period.