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The British government is set to unveil a regulatory framework for the cryptocurrency sector this month to reassure digital asset firms about the UK’s potential as a global hub, amid increasing competition from the crypto-friendly US under Donald Trump’s leadership. 

Sources close to the Treasury have indicated that two legislative measures will focus on regulating stablecoins and creating an exemption for staking services, Bloomberg reported.

Trump’s recent election win has sparked optimism in the crypto industry, with the former president pledging to turn the United States into the “global crypto capital.” His proposed actions include establishing a federal Bitcoin reserve, ensuring future Bitcoin mining happens exclusively on US soil, and replacing current US Securities and Exchange Commission (SEC) Chair Gary Gensler.

The UK’s new regulatory measures, expected to cover stablecoins and staking services, are intended to position Britain as a competitive alternative to the US, the European Union, and other jurisdictions that have made strides in crypto regulation. 

Under the proposed legislation, stablecoins — digital assets tied to stable assets like the U.S. dollar — would receive regulatory attention, paving the way for the Financial Conduct Authority (FCA) to establish new guidelines. 

Meanwhile, staking services, which allow users to lock up assets to support blockchain operations and earn yields, would be exempt from certain regulations under the current financial classification.

Laura Navaratnam, UK policy lead at the Crypto Council for Innovation, emphasized the urgency of regulatory action: “The UK has a real opportunity to capitalize on a second-mover advantage, but only if it can mobilize. We are a little bit further than even the Treasury and the regulators would’ve ideally wanted,” Navaratnam told Bloomberg.

The Treasury, which previously announced plans to issue more precise guidance on crypto by 2024, did not provide any immediate comments. However, the Financial Conduct Authority (FCA) has stated that it plans to release a roadmap for regulating crypto, with an initial consultation paper on stablecoins expected early next year. This phased approach could see the FCA tackling other areas of crypto regulation over time, sources close to the matter said.