The landmark Financial Services and Markets Act 2023 (FSMA) bill last Thursday passed Royal Assent which ultimately means that crypto regulation within the UK is almost a formality.
Once lawmakers in the country iron out specific rules and regulations for crypto and digital assets, the UK and Prime Minister Rishi Sunak are delivering on last year’s claims that they want the country to become a ‘global hub for cryptocurrency innovation’.
A crypto regulatory bill has been long touted to receive Royal Assent since it was first unveiled in July 2022, which goes into great detail on how crypto and digital assets should be integrated alongside the traditional financial services and how they will bring forward an adoption phase.
Su Carpenter, Director of Operations at CryptoUK, who has worked alongside the government to help work on use cases and plans to formally regulate digital assets in the country, is ‘delighted’ the FMSA bill has now received Royal Assent.
She said: “We are delighted that the Financial Services and Markets Act has received Royal Assent, just over a year since the Government first set out its vision for the UK to become a global crypto hub.
“CryptoUK, along with our members from across the crypto and digital asset industry, have been calling for regulation of the market since 2018 to support the continued growth of a healthy, innovative and responsible industry in the UK.
“The passing of this transformational piece of legislation into law is a big step forward towards the UK becoming a global hub for crypto and digital assets and is a significant step in terms of providing the necessary regulatory clarity and business certainty for firms to invest here in the UK.”
The passing of the FMSA now puts the UK in a strong position to become a leader in the crypto and Web3 space. With regulation almost seemingly round the corner, the country has opened itself up to companies and exchanges to help set up shop.
Regulation in the crypto market has been of great importance to many countries across the world following the collapses of TerraLuna and FTX last year, with some countries taking much different approaches to its measures.
Whilst the European Union’s (EU) Markets in Crypto Assets (MiCA) regulatory bill is set to come into force in 2024, the US is taking a much more aggressive approach to handling crypto exchanges who they deem to be circulating unregistered securities, despite no signs of progression on working on its own cryptocurrency bill.
Nick Jones, CEO at Zumo, commented on the announcement of FMSA and what it means for the regulatory landscape in the UK.
He stated: “Over the past week, we’ve witnessed significant movements from institutions, indicating a positive future for the global digital asset sector. The announcement paves the way for an ambitious schedule of legislative and regulatory efforts aimed at comprehensive regulation of the UK’s digital asset sector.
“This development is welcomed at Zumo, as we have always prioritised compliance and sustainability, working closely with regulators. The positive news this week reinforces an aligned and proportionate approach that can foster innovation and realise competitive advantages for the growing UK digital asset sector.”
However, despite the encouraging developments of the FMSA bill, the UK’s Financial Conduct Authority (FCA) has warned crypto companies of its advertisement measures when it comes to branding their products to the public, highlighting the risks involved in trading.
The financial watchdog has also been proactive on its stance against unlicensed crypto ATMs, shutting down several this year following its revised rules on them.
Despite this, Carpenter believes that the UK must now continue its momentum of moulding the country into a hub for crypto innovation by providing a clear rule set that is easy to follow to help bring about a new wave of adoption.
She concluded: “The Financial Services and Markets Act provides a sensible regulatory approach for crypto and digital assets, including stablecoins, bringing these assets within the scope of existing UK financial services regulations.
“It is imperative now that the UK maintains its momentum and continues to focus on providing regulatory clarity for crypto and digital asset businesses that want to set up and invest in the UK.”
