The UK has laid out “ambitious plans” to “vigorously regulate” various crypto activities, as it seeks to protect customers and grow its economy. Over the next three months, UK authorities will accept public comment on new regulatory proposals designed to govern digital assets like traditional finance.
The British government intends to regulate the crypto market and remains committed to innovation
The London executive branch has announced plans to regulate a wide range of cryptocurrency-related activities through new rules for the young industry that will be consistent with UK regulations for the traditional financial sector.
a public consultation on the proposals has been launched and will continue until the end of April. In the published document, the UK Treasury reaffirms its belief that “cryptographic technologies can have a profound impact on financial services.” The document provides an overview of the upcoming consultation work.
The British government also insisted that its approach to regulation “mitigates the most significant risks, while taking advantage of crypto technologies” and expressed hope that it would allow the crypto industry to expand, invest and create jobs. Treasury Economic Secretary Andrew Griffith emphasized:
We remain steadfast in our commitment to grow the economy and enable technological change and innovation, and this includes crypto-asset technology. But we must also protect the consumers who are embracing this new technology.
The draft rules are intended to ensure that crypto exchanges “have fair and robust standards.” They will be responsible for “defining the detailed content requirements for admission and disclosure documents”, a advertisement revealed on Wednesday.
The officials also indicated that they want to strengthen the rules for intermediaries and custodians that facilitate cryptocurrency transactions and store clients’ digital assets. They believe this would help establish a “world first regime” for crypto lending.
The move comes after several high-profile failures that rocked the crypto space, including the collapse of major cryptocurrency exchange FTX. The British government has previously said it intends to adopt regulations that prevent market abuse.
Most UK crypto asset companies do not receive regulatory approval
The regulatory proposals follow last week’s announcement from the UK Financial Conduct Authority (FCA) that the majority of entities wanting to do business with crypto assets in Britain, 85% of all applicants, have failed to convince regulators that they can meet the country’s minimum anti-money laundering (AML) requirements .
The regulator said it had identified significant flaws in areas such as due diligence, risk assessment and transaction monitoring. “In many cases, key personnel lacked the appropriate knowledge, skills and experience to carry out their assigned functions and control risks effectively,” the FCA said.
Meanwhile, the House of Commons Treasury Committee is still investigating the potential threats and opportunities associated with crypto assets and the need for regulation. “We are in the midst of an investigation into crypto regulation and these statistics have not misled us into the impression that parts of this industry are a ‘Wild West,'” said Harriett Baldwin, chair of the select committee.
What effect do you think the upcoming UK regulations will have on the development of the country’s crypto industry? Share your expectations in the comments section below.
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