London, Monday, October 30: On Monday, Britain announced its intent to establish its inaugural set of regulations for the cryptocurrency sector.1
These regulations will mandate that market participants gain authorization before providing services to consumers.
The European Union has already initiated the world’s first comprehensive rules designed specifically for crypto asset markets in June, attracting cryptocurrency firms looking for regulatory clarity to establish their operations in the EU.2
The UK’s Finance Ministry affirmed its commitment to proceed as outlined in a public consultation in February. This approach necessitates that companies involved in cryptoasset activities receive authorization from the Financial Conduct Authority (FCA).
However, an exact commencement date was not provided.
The ministry’s stance is that companies dealing directly with UK retail consumers should be authorized, regardless of their geographical location.3
The new regulations are expected to be integrated into existing market laws instead of creating a separate framework.
The ministry reiterated its commitment to fostering a regulatory environment that encourages innovation while maintaining financial stability, ensuring that people can confidently and securely utilize new technologies.
To provide the sector with clarity, the ministry will expedite the implementation of these rules, with secondary legislation to be presented to parliament next year.
The Treasury’s approach was seen as broadly consistent with the EU regulations.
The ministry also indicated its intentions to regulate stablecoins, digital currencies backed by government-issued currencies, for retail payments.
Legislation for FCA oversight of stablecoins will be presented in 2024.
The ministry also intends to define regulations for handling the potential failure of a significant stablecoin.
Currently, crypto companies are only obligated to establish safeguards against money laundering. However, this month, Britain introduced rules governing the marketing of cryptoassets.
- Bloomberg: https://www.bloomberg.com/news/articles/2023-10-30/uk-confirms-plans-to-bring-crypto-under-stricter-rules[↩]
- ESMA: https://www.esma.europa.eu/esmas-activities/digital-finance-and-innovation/markets-crypto-assets-regulation-mica[↩]
- Reuters: https://www.reuters.com/world/uk/britain-push-ahead-with-rules-cryptoassets-2023-10-30/[↩]
