The UK financial services sector wants to be a leader in crypto regulation.
The consultation paper addresses stablecoins, NFTs and ICOs.
There however won’t be a separate regulatory system for the crypto space according to the treasury.
His Majestry’s Treasury has published an extensive 80-page consultation paper for the much anticipated crypto regulation in the UK.
The paper covers a wide range of crypto topics ranging from the problems with algorithmic stablecoins to initial coin offerings (ICOs), and non-fungible tokens (NFTs). It contains proposals for the upcoming crypto regulations in the United Kingdom that aim to position the UK financial services sector at the forefront of crypto regulations globally.
Generally, hardline crypto control measures have been gaining momentum across the globe especially following the rate at which crypto firms and projects are collapsing taking with them billions of dollars of investors’ money. By setting up proper crypto regulation, the UK could soon become a hub for cryptocurrency projects.
No separate regulations for crypto
While publishing the consultation paper, the Treasury also announced that there shall not be a separate regulatory system for cryptocurrencies. The proposed crypto regulations will fall under UK’s Financial Services and Markets Act 2000 (FSMA).
The Financial Conduct Authority (FCA) will customize the existing FSMA’s rules to accommodate the digital assets market.
Once the crypto regulations are set into place, crypto market players will be required to register afresh despite having done that earlier under the FCA licensing regime. But contrary to the earlier regulatory regime, crypto firms will not be required to make regular market data reports although crypto exchanges will be required to keep the data and make it available anytime.
Also contrary to earlier speculations, the UK Treasury has decided not to ban algorithm stablecoins. It has instead categorized them as “unbacked crypto-assets” instead of stablecoins. As a result, crypto promotions will have to exclude the term “stable” when marketing the algorithmic stablecoins.