Crypto News – There are new developments regarding UK crypto regulation. The final rules for the cryptocurrency ecosystem were released by the U.K. government, which stated that regulations will be implemented gradually and that early next year laws pertaining to fiat-backed stablecoins will be introduced.
Breaking News: 2023 Final Proposals for UK Crypto Regulation Published
An update released on Monday states that when the government incorporates lending and trading into the purview of traditional financial regulation, other crypto domains, like algorithmic stablecoins, will follow. These regulations will place pertinent operations under the Financial Conduct Authority‘s (FCA) jurisdiction.
A sector that has been complaining the government is taking too long to act is expected to applaud the plans, which are in line with an April 2022 policy announced by Rishi Sunak, the then-finance minister and current prime minister, to establish the U.K. as a hub for crypto assets.
Andrew Griffith’s Ideas Have Changed on How to Handle Crypto Assets
On the other hand, Andrew Griffith, the Treasury Minister, expressed his satisfaction in presenting the final plans for crypto asset regulation in the United Kingdom in a statement that was attached to the document. If the framework is established, the United Kingdom will be the most apparent location for launching and growing a cryptoasset company.
A crypto consultation was released in February by the Treasury, the government’s financial branch, and it ended in April. Bitcoin can now be regarded as a regulated activity due to the Financial Services and Markets Act 2023, which was passed by Parliament in June.
The goal of the government is to incorporate cryptocurrency into the existing framework governing financial services. To be clear, Griffith’s ideas to clarify how crypto assets are treated now take into account both NFTs and conventional financial instruments.
FCA to be the Decision-Maker
According to the document, the FCA will shortly hold consultations on a framework for authorizing cryptocurrency enterprises. Additionally, the government intends to create equivalent measures for foreign companies. The government suggested that an overseas-regulated trading venue may apply to authorize its U.K. branch. The FCA will decide exactly what constitutes an authorized foreign trading venue. Additionally, the government stated that it is not planning to outlaw decentralized finance (DeFi), citing the need to wait for that sector of the market to develop before regulating it.
Additional government documents outline how stablecoins backed by fiat money will be issued and held in custody under the financial services regulations that were put in place in 2001. These regulations also include additional guidelines to guarantee that any digital payment system can fail safely and not bring down the financial system. In May, the central bank initially opened up consultations on a systemic stablecoin framework.
Leave a comment