The UK and US have established a new taskforce to cooperate on building cryptocurrency market infrastructure and regulation in both countries in order to unearth new capital opportunities.
Dubbed the ‘transatlantic task force of the future’ in a statement from the UK’s Treasury, published on September 22, the new working group will reduce “burdens for UK and US firms raising capital cross-border”.
The Treasury did not outline specific areas for which the taskforce would be focusing on. However, one of the primary objectives of the taskforce is to set up options for short-and-medium term collaborations on developing digital asset and capital markets, in tandem with developing regulatory policies in both markets.
With the US having passed cryptocurrency laws such as the GENIUS and CLARITY Acts in recent months, the UK is looking to lean on the country’s developing crypto regulatory framework to enable it to build out its own.
UK Chancellor Rachel Reeves met with US Treasury Secretary Scott Bessent last week, before President Donald Trump’s visit to the UK. Both Reeves and Bessent agreed on the establishment of the taskforce during the meeting.
Officials from both the UK and US Treasury departments, as well as regulators, will chair the taskforce and will report back to their respective teams across the next 180 days for recommendations.
The FCA to speed up the process
The UK’s Financial Conduct Authority (FCA) has also committed to shortening the licence application process for relevant crypto and digital asset companies to enter the UK’s sector.
The FCA was granted oversight of the UK’s crypto sector in 2023, and while it has introduced certain laws pertaining to marketing and the advertisement of high-risk products to consumers, it has also been criticised for its licence application process being too slow.
The financial regulator has so far registered 55 companies, but due to its marketing and consumer protection rules, it has seen the exit of some of the world’s largest crypto companies from the UK market; Binance is one example.
This labelled slow application process has seen a share of crypto and digital asset companies set up shop in countries such as Singapore and United Arab Emirates, as well as other European countries instead of the UK as these regions have favourable and quicker licence application processes.
The process time for licences in the UAE, governed by the Virtual Assets Regulatory Authority (VARA), can vary from company to company, but typically takes four to six months for approval. The Monetary Authority of Singapore (MAS) operates a similar licence application process, which again can vary, but typically takes several months and up to a year for approval.
In order to catch up to other crypto markets, the FCA has pledged to update its approach, aiming to speed up approval rates and make the process more fair and transparent for companies.
“We have sped up our authorisations across the piece and have made some quite significant progress,” said David Geale, FCA’s Executive Director for Payments and Digital Finance.
“What we tend to get is a better quality of application and that certainly speeds things up.”
Much needed UK crypto movement?
As the US has been proactive in its bid to become the world’s crypto capital, the UK’s Treasury and relevant regulators like the FCA have been accused by ex-Chancellor George Osborne of playing crypto “catch up” and in danger of missing out on the second crypto growth phase involving stablecoins.
Nick Jones, Founder and CEO of Edinburgh-based digital asset company Zumo, has also criticised the UK’s crypto approach in recent years but praised the transatlantic taskforce as “great news” for the UK sector.
“This is great news for the industry and helps to extend the ‘Special Relationship’ into the digital age,” Jones told Payment Expert.
“The Treasury has said the group will explore ways in which to reduce the burden of cross-border financing, which will be a welcome start, and I hope that the taskforce draws on the inherent advantages of the UK market – such as its fintech talent, strong investor appetite for digital assets, and world-renowned financial services and legal structures – to unlock the sector’s considerable potential to supercharge much-needed economic growth.”
“The taskforce will hopefully now enable the emergence of short-term benefits that will provide a timely boost for the sector while the longer-term regulatory framework is still being defined.”
