A few days ago, the UK Parliament was considering the Financial Services and Markets Bill. It should be remembered that this aimed to regulate the activities of cryptocurrencies, especially stablecoins. It would seem that the bill has progressed well. Indeed, the British government has just announced new measures to regulate cryptocurrencies.
A new bill on financial services and markets
Last week, the British Parliament was due to vote on the Financial Services and Markets Bill. This would, among other things, extend the powers of the law, especially in terms of regulation, financial promotion, and other activities related to cryptocurrencies. L’amendment, which is 335 pages, was written by Financial Secretary to the Treasury Andrew Griffith. It was introduced in July and received second reading in the House of Commons on September 7th.
It was a pleasure to give evidence to the House of Commons Financial Services & Markets Bill Committee today, answering questions from @griffitha @TulipSiddiq and @MartinJDocherty on UK regulatory competitiveness, crypto-assets and stablecoin. More here: https://t.co/J0f1OCtqb5 pic.twitter.com/ZzjCwaPEiD
— Adam Jackson (@Adam_E_Jackson) October 19, 2022
On August 9, the Financial Conduct Authority (FCA), the UK’s financial regulator, issued a letter detailing its strategy for supervising the alternative portfolio of financial firms. In the letter, it could be read that the final rules for the promotion of cryptocurrencies were to be published. This is once the Treasury has formalized the legislation allowing them to be included in the attributions of the FCA.
Cryptocurrencies are very volatile. No consumer protection.
The measures are taken by the FCA
Recall that the majority of crypto businesses in the UK are outside the control of the FCA, despite the fact that the latter has requested that said businesses must register by next year. This measure was presented by the FCA as a means which makes it possible to fight effectively against money laundering on the one hand. On the other hand, to eradicate the financing of terrorism. This had the merit of being clear to those who believed it was done to monitor their activities.
Measures concerning asset promotion at high risk were also taken last August. So, at the instigation of the FCA, the UK’s Advertising Standards Authority has been tougher in monitoring cryptocurrency-related advertising. On October 10, the Economic and Monetary Affairs Committee of the European Parliament adopted the bill on cryptocurrency markets. More recently, the parliamentary vote has just fallen.
Better regulate digital assets
Thus, on October 25, the United Kingdom declared that it had made progress on the Financial Services and Markets Bill. This will aim to better regulate digital assets such as Bitcoin (BTC). For the cryptocurrency industry and companies in the sector, this proposal is a kind of recognition that they welcome with open arms.
Chair of the APPG @DrLisaCameronMP asks to meet with Chancellor @Jeremy_Hunt about @hmtreasury’s commitment to regulation and consumer protection and the vast potential of #crypto & #DigitalAssets in job creation, innovation and growth. #cryptocurrency pic.twitter.com/yiuC89Ytf2
— Crypto & Digital Assets APPG (@cryptoappg) October 23, 2022
In this bill, there is a series of measures that seem to reinforce the idea that the United Kingdom wishes to become a global hub for cryptocurrencies. Lisa Cameron, Member of Parliament and Chair of the All-Party Parliamentary Group on Cryptocurrencies and Digital Assets, for her part, shared that there is still a long way to go. She made particular reference to lawmakers who do not see cryptocurrencies in a good light.
“We need a proportionate approach to regulation that balances risk, ensures high levels of consumer protection and does not hinder growth and innovation in the sector,” Cameron explained.
Waiting for royal approval
Going back to the bill, it builds on existing measures to expand the regulation of stablecoins. We can also find a new name for the latter, namely the « Digital Settlement Assets » (DSA). Perhaps the idea being to try to separate stablecoins from cryptocurrencies. According to the UK government, cryptocurrencies use some form of Distributed Ledger Technology (DLT). For their part, the DSAs, which refer to stablecoins, are actually digital settlement assets. He also believes that stablecoins have the potential to become a popular means of payment.
Asked about it, the British government added that new sets of measurements were soon to be shared. They aim to improve the regulation of the blockchain, cryptocurrencies in general and Bitcoin in particular. It should be noted that for cryptocurrencies and stablecoins to be concretely recognized as financial instruments, the measures must be validated and enshrined in law. For that, it will still be necessary for the House of Lords to approve the bill first. Then, that King Charles III validates it by affixing his royal approval. And that will definitely take time.
On the same subject : According to an FCA survey, more than 2 million Britons are investing in crypto in 2021