ARTICLE 5 - PAGE 17
| BLOCKCHAIN INDUSTRY REVIEW
How the UK Plans to Regulate the Rapidly Growing Cryptocurrency Industry Post Brexit
by Merkle Science
The latest consultation solicits opinion on how the UK can ensure that its cryptocurrency and stablecoin regulations are equipped to harness the ongoing advancements in technology, supporting innovation and competition while reducing risks to consumers.
Promoting compe tition, innovation, and supporting UK competitiveness. This means continuing to encourage and support UK fintech firms, and ensuring consumers and businesses have access to a variety of high-quality services and products.
In the last two years, the UK has entirely revamped its approach to regulating cryptoasset providers and businesses. From amendments to the money laundering and terrorist financing regulations, to the introduction of an FCA registration regime and now a consultation paper on the regulatory approach to cryptoassets and stablecoins. The UK looks set to lead the global financial sector once again, this time with carefully crafted policy Following are the key The government is planto encourage virtual currency adoption and innovation, objectives of the Consulta- ning to achieve the above while keeping consumer protection at the center of its objectives by following tion Paper: legislative agenda. a set of principles which Protecting finaninclude “maintaining cial stability and mar- the current division of The paper marks the secA week after officially ket integrity. This includes UK regulator responsiexiting from the EU, in the ond Treasury-led crypto maintaining the appropri- bilities as far as possible consultation. The first, first week of this month, ate regulatory standards, and applying the princiannounced last summer the Exchequer released ensuring infrastructure is ple of ‘same risk, same and concluded in October, a consultation paper to operationally resilient and regulatory outcome’. The set out plans to increase gather feedback from that safeguards are in place approach supports the oversight into cryptocurstakeholders concerning to mitigate any risks to government’s desire to the government’s regulato- rency promotions in order financial stability. ensure a level playing field ry approach to cryptocur- to protect investors. The and reduce opportunities results of which will be rencies and stablecoins. Delivering robust for arbitrage. In practice, published “in due course,”. consumer protecit means drawing on as per Her Majesty’s tions. This means ensuring existing regulations and Treasury’s latest update. consumers benefit from requirements insofar as Furthermore, the FCA, the same level of protection they are applicable, with which is fully-funded by they would when other adjustments or additionthe firms it regulates, has regulated instruments are al requirements where also proposed to increase being used for the same needed to address specific fees and levies from purpose (e.g. payments). characteristics or risks.” 2021/22 for all financial institutions that require The government is further attempting to ensure an FCA’s license/registration agile approach that reflects international discussions to operate, including cryp- and also has room for accommodating future financial toasset businesses. services and payment regulation changes.
