The UK Treasury is moving closer to defined crypto legislation as the country is finalising “sweeping rules” to regulate the country’s crypto industry, according to The Financial Times.
The plans include limits on foreign companies entering and selling their crypto assets in the UK, with an increased focus on how to mitigate the collapse of exchanges such as FTX to better serve and protect customers.
The Treasury has been working alongside the Financial Conduct Authority (FCA) as the UK watchdog has been ramping up its efforts on unregulated crypto firms, but is also handing out regulatory approval to firms such as Crypto.com to become a crypto asset business within the UK.
Lawmakers within Parliament will conduct a consultation on the proposed crypto regulations, having previously agreed upon a fresh set of guidelines surrounding stablecoins and how to securely implement the potential of a Digital Pound central bank digital currency (CBDC).
Prime Minister Rishi Sunak has been vocal in his support to foster crypto adoption within the UK, outlining plans to create the country as a ‘hub for crypto assets’ during his time in his previous role as Chancellor last May.
Since Sunak has taken over the reins as PM, crypto regulation talks have accelerated, with the new plans set to provide the FCA with new powers to preside over the crypto sector more broadly and monitor companies who operate and advertise crypto assets.
Furthermore, restrictions on selling in the UK market could be updated in the UK Market bill.
Last July, Parliament unveiled the country’s first crypto bill, which would be included in a potentially amended Market bill. The bill was amended last October to include future provisions for how cryptocurrencies operate within the UK.
Speaking during a reading of the amended bill, Financial Secretary to the Treasury, Andrew Griffith, stated his belief to bring cryptocurrencies “within the scope of regulation for the first time”.
He stated: “The substance here is to treat them (cryptocurrencies) like other forms of financial assets and not to prefer them, but also to bring them within the scope of regulation for the first time.”
“The Treasury will consult on its approach with the industry and stakeholders ahead of using the powers to ensure the framework reflects the unique benefits and risks posed by crypto activities.”
The crypto industry has been marred with two high-profile collapses this year that have significantly decreased cryptocurrency prices to new low points it has not experienced in several years.
The most recent collapse of FTX has accelerated discussions from countries on how to properly regulate crypto asset firms and bring them in line with a defined legal framework to better protect customers.