- The UK financial services sector wants to be a leader in crypto regulation.
- Consultation papers are available for stablecoins, NFTs, and ICOs.
- However, according to the Ministry of Finance, there is no separate regulatory system for the cryptocurrency space.
Her Majesty’s Treasury has a large 80-page consultation form For long-awaited crypto regulation in the UK.
The paper covers a wide range of cryptographic topics, from the problem of algorithmic stable coins, to initial coin offerings (ICOs), and non-fungible tokens (NFTs). This includes upcoming crypto regulation proposals in the UK aimed at putting the UK financial services sector at the forefront of global crypto regulation.
In general, tough crypto control measures are gaining momentum around the world, especially following the speed at which crypto companies and projects collapse, taking billions of dollars of investor money away. With the set up, the UK could soon become a hub for cryptocurrency projects.
No separate regulations for crypto
While issuing the advisory paper, the Treasury Department also announced that it would not have a separate regulatory system for cryptocurrencies. The proposed crypto regulation falls under the UK’s Financial Services and Markets Act 2000 (FSMA).
The Financial Conduct Authority (FCA) will customize existing FSMA rules to accommodate the digital asset market.
Once the cryptocurrency regulations are in place, cryptocurrency market players will have to re-register, even if they have previously registered under the FCA licensing regime. However, in contrast to previous regulatory regimes, crypto exchanges are required to retain data and make it available at all times, while crypto companies are not required to produce regular market data reports.
Also, contrary to previous speculation, the UK Treasury has decided not to ban algorithmic stablecoins. Instead, it classified them as “unbacked cryptoassets” rather than stablecoins. As a result, crypto promotions should drop the term “stable” when selling algorithmic stablecoins.