By George Ward
Despite the Conservative Party’s so-called support for cryptocurrency under the new Prime Minister, Rishi Sunak, the UK is set to revamp its crypto guidelines. The updated guidelines will empower its financial regulator to oversee the digital asset industry’s activities and limit foreign service providers.
According to a report from the Financial Times, the collapse of the FTX exchange has dramatically influenced the direction of the regulatory regime in the United Kingdom. Accordingly, the Treasury is about to conclude the new legislative package that will provide the guidelines for the Financial Conduct Authority (FCA) to operate.
As a result, the FCA would monitor the advertisement and operations of crypto companies in the UK alongside restrictions on foreign crypto exchanges offering services to the UK market.
However, the Financial Times report only provided a few details about the new move, especially those on international crypto service providers. The assumption is that they would be required to register with the FCA.
Meanwhile, the registration process is challenging for the existing crypto exchanges in the country. Reports indicate that nearly 85% of the applications to the FCA have failed to pass its anti-money laundering (AML) tests.
According to the FCA’s chief executive, Nikhil Rathi, the new guidelines are part of the financial services and market regulations. The massive bill includes but is not limited to digital asset regulations and is awaiting approval by the British Parliament.
With the UK launching its official consultation on cryptocurrency in 2021, policymakers will likely implement the country’s proposed regulations in 2023.
Deciding The Next Move
The Treasury committee is scheduled to deliberate with the FCA and Bank of England (BoE) experts on December 7 about the risks of crypto. Their discussions would include the merits and demerits of the central bank digital currency (CBDC).
Part of the hearing will also feature the investigative journalist’s report covering the news about the investments made by British football supporters under the impact of crypto advertisements.
Early last month, members of several groups in the digital economy opened a public hearing to educate people about the risks and benefits of crypto assets, NFTs, and blockchain to the British economy.
Meanwhile, the BOE’s deputy governor, Jon Cunliffe, has stated that the crypto industry needs comprehensive regulations to save it from itself. He added that despite the much-talked-about decentralization of the ecosystem, companies and other critical stakeholders still control what happens in the space and earn massive revenue from the current way the ecosystem runs.