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The collection was considered a virtual asset and could not be released, Guernsey Post says. After recent scandals in the crypto sector, the Treasury has downplayed its significance in Britain’s efforts to find growth. The https://www.xcritical.com/ U.K.’s Treasury, Financial Conduct Authority, Bank of England, and the Payments Systems Regulator will soon be able to introduce and enforce rules to regulate the sector. It is estimated that English law governs £250 billion of global mergers and acquisitions, and 40 per cent of global corporate arbitrations, so keeping the law up to date is vital to ensuring that the UK remains the law of choice internationally. Sir Jon Cunliffe told the BBC that if the value of cryptocurrencies fell sharply, it could have a knock-on effect. „What does the future of crypto here in the UK look like? No-one knows for sure,“ he said in a speech.
UK sets out plans to regulate crypto and protect consumers
But “you’ve got this change in government, and that always delays the implementation of a [regulatory] regime,” Lynch said. But since then, the industry worldwide has been buffeted by a series of crises – most recently, the collapse of the FTX exchange, which prosecutors have described as „one of the biggest financial frauds in US history“. The UK’s plan to finally put concrete proposals in place will be welcomed by consumer investors hit in their pockets. The sector has had a calamitous year, with assets collapsing in value by an estimated 75% from their peak of about $3 trillion in November 2021. Jack Schickler was a CoinDesk reporter focused on crypto regulations, cryptocurrency regulation uk based in Brussels, Belgium.
Investment products that reference cryptoassets
At the time of writing, Bitcoin had reached an all-time high of $70,000. John Glen also confirmed that the government will consult on wider regulation of the cryptoasset sector later this year. The government further confirmed that it will initiate a research programme to explore the feasibility and potential benefits of using DLT for sovereign debt instruments. Stablecoins are a form of cryptoasset that are typically pegged to a fiat currency such as the dollar and are intended to maintain a stable value. With appropriate regulation, they could provide a more efficient means of payment and widen consumer choice. While some cryptoassets are outside the FCA’s perimeter, investment products such as derivatives contracts that reference these cryptoassets are likely to be within our perimeter, as we have previously stated.
UK Crypto, Stablecoin Rules Receive Royal Assent, Passing Into Law
- It is essential that the law keeps pace with evolving technologies and this legislation will mean that the sector can maintain its position as a global leader in cryptoassets and bring clarity to complex property cases.
- In April 2022, the government committed to introducing a new regulatory regime for cryptoassets, reflecting the risks and opportunities they present.
- Regulators are racing to draw up rules to manage cryptocurrencies amid concern that their growing popularity could threaten established financial systems.
- She previously worked as an intern for Business Insider and Bloomberg News.
- The Act „gives us control of our financial services rulebook,“ following the U.K.’s exit from the EU, enabling regulation of crypto assets to support their safe adoption in the U.K., said Financial Services Minister Andrew Griffith in a statement.
- The Financial Conduct Authority said on Monday it would “not object” to the creation of bitcoin and ethereum-backed exchange traded notes for professional investors.
- The bill will also bring stablecoins into the scope of payments rules.
„The sooner we have details around concrete proposals, the easier it is to plan for and build towards.“ Ministers estimate up to 10% of UK adults now own some form of crypto. Crypto currency firms are waiting to see how November’s vote will impact upon them.
UK unveils wide-ranging plans to regulate crypto industry
Grant Thornton UK LLP is a member firm of Grant Thornton International Ltd (GTIL). GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions. This includes security tokens, such as shares or debt instruments, or units in a collective investment scheme using tokens to represent investors’ interests. However, defining the regulatory perimeter has been challenging and prone to a high degree of interpretation. We’ve worked with a significant number of cryptoasset related business models, primarily through the Regulatory Sandbox and Innovation Pathways.
The UK continues to take purposeful steps towards regulating the cryptoassets sector, focusing especially on protecting consumers and tackling financial crime. The AML/CTF regime will aim to ensure that businesses carrying on in-scope cryptoasset activity can spot, disrupt or stop money being laundered through the system. The Treasury said late on Tuesday it would unveil a series of proposals to “regulate a broad suite of cryptoasset activities, consistent with its approach to traditional finance”. It also said it would temporarily backtrack on a previous pledge to align the regulation of crypto promotions with the standards applied to stocks, shares and insurance products.
Cryptoassets are cryptographically secured digital representations of value or contractual rights that use some type of distributed ledger technology (DLT) and can be transferred, stored or traded electronically. Economic Secretary to the Treasury Andrew Griffith said the government remained „steadfast in our commitment to grow the economy and enable technological change and innovation – and this includes crypto-asset technology“. The Treasury says that will allow crypto to benefit from the „confidence, credibility and regulatory clarity“ of the existing system for financial services, as set out in the UK’s Financial Services and Markets Act 2000 (FSMA). Today’s news also means the UK legal sector will be better equipped to respond to new technologies, attracting more business and investment to the legal services industry which is already worth £34 billion a year to the economy. Our robust approach to regulation mitigates the most significant risks, while harnessing the advantages of crypto technologies.
Cryptoasset businesses that are registered with the FCA for anti-money laundering purposes will be allowed to issue their own promotions, while the broader cryptoasset regulatory regime is being introduced. While this market continues to move at pace, UK regulation is progressing under a more gradual, phased approach to include various forms of cryptoassets. The intention is to implement a more expansive, comprehensive regulatory regime, underpinned by the Government’s legislative plans. Due to our concerns about the ability of retail consumers to reliably value and assess the risks of investing in such products, we have prohibited the sale of derivatives and exchange traded notes referencing cryptoassets.
This follows approval by the US Securities and Exchange Commission (SEC) of spot Bitcoin ETFs in January 2024. The government intends to legislate to bring stablecoins – where used as a means of payment – within the payments regulatory perimeter, creating conditions for stablecoins issuers and service providers to operate and invest in the UK. We want to see the businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term. If your firm is looking to develop innovative propositions using crypto assets, we may be able to offer support via our Innovation Hub. „We are paying close attention to these plans and to the regulators’ plans, because we would not want our constituents to think cryptocurrencies are any less risky if they are regulated,“ she said.
Tech-savvy owners of Bitcoin and other digital assets will benefit from greater legal protection thanks to an important clarification to the law. Under plans set out by the government today (1 February), it will seek to regulate a broad suite of cryptoasset activities, consistent with its approach to traditional finance. “We remain steadfast in our commitment to grow the economy and enable technological change and innovation – and this includes cryptoasset technology. “Bitcoin is by far the most well-known crypto asset, and for it to be very difficult for the UK public to be able to buy it, how can we claim to be a crypto hub if we only offer risky ways of buying this asset? ” said Tim Lowe, strategic adviser at London-based institutional staking firm Attestant.
Last year, Rishi Sunak, then Chancellor, said he wanted to make the UK „a global hub for crypto-asset technology“, external. Complete digital access to quality FT journalism with expert analysis from industry leaders. The UK remains committed to creating a regulatory environment in which firms can innovate, while crucially maintaining financial stability and clear regulatory standards so that people can use new technologies both reliably and safely. The Treasury has been consulting on its proposed rules for the sector since February, in line with the Conservative Government’s objective to turn the country into a crypto hub.
While there’s much still to work through, crypto regulation continues to take shape and will be one to watch through 2024 and beyond. Once any legislation is put to Parliament, it will be the job of the regulator, the Financial Conduct Authority, to draw up the detailed rules the sector will have to follow. „If you don’t have a proper regime, you drive people off shore,“ he said. Jeremy Barnett, a barrister and honorary professor of algorithmic regulation, at University College London, said the UK had much to gain, as entrepreneurs were currently choosing to set up elsewhere.
This enables a new and exciting sector to safely flourish and grow, boosting jobs and investment. Cryptoassets – commonly known as ‘crypto’ – are a relatively new, diverse and constantly evolving class of assets that have a range of potential benefits, as well as posing risks to the consumer. Wild fluctuation in the value of some digital currencies has led regulators to warn they pose risks. However, they are increasingly going mainstream, with major financial companies now investing in them. Stablecoins are currently used in the United States to facilitate trading, lending or borrowing of other digital assets.
Our Innovation Hub supports innovative businesses to launch new products or services that benefit consumers. „I want to see people who have cryptocurrency services and products encouraged to open for business in the UK. It wants to create a level playing field between traditional and emerging financial services, where the principle is „same risk, same regulatory outcome“. The Treasury also said on Tuesday that it would seek to strengthen rules surrounding companies that facilitate crypto transactions and safeguard customer assets.