UK will tighten regulation of cryptosphere
UK Treasury advises on crypto and stablecoin regulation
Two and a half months have been allotted to receive comments on this issue. You can leave your feedback until March 21. The Treasury invites stakeholders including crypto startups to share their views on tighter regulation.
What is the essence of innovation?
The UK Treasury wants to regulate cryptocurrencies as traditional payment services to support innovation and consumer protection.
Representatives of the department said that the development of cryptocurrencies and stablecoins could carry the same risks for consumers as traditional regulated payment systems. Therefore, this industry needs to be regulated.
The regulator has no plans to stifle the cryptosphere. According to John Glen, MP and UK Treasury Secretary, a flexible and risk-based approach will be adopted to ensure a level playing field for cryptocurrencies and traditional finance.
It is also necessary to reduce the impact of arbitration. To this end, the regulatory approach should focus on the risks that may be most acute. You also need to take into account international experience, since cryptocurrencies are cross-border in nature.
As for stablecoins, the Government plans to introduce a regulatory regime for coins used as a means of payment. Both issuers of stable tokens and enterprises that work closely with them will have to obey the regulations.
In terms of consulting, the Treasury wants to hear from the industry on the introduction of stricter cryptocurrency regulation. Some answers have already been received. For example, George Morris, a partner at the London-based law firm Simmons & Simmons, believes the Government wants to impose a "burdensome regime."
If the proposal is accepted, UK stablecoin exchanges will have to register with the FCA. This will lead to the imposition of additional restrictions for ordinary users. This is bad for both cryptocurrencies and the country's economy as a whole.