The regulation changes will increase the financial regulator’s authority and increase oversight of the cryptocurrency market.
Despite the rhetorical acceptance of cryptocurrency by the Conservative Party in the UK under the new Prime Minister Rishi Sunak, the future regulatory framework is expected to increase monitoring of the sector.
The legislative updates will likely restrict foreign companies’ operations in the UK while increasing the financial regulator’s authority.
The Financial Times reported that the FTX collapse had an impact on the way the UK’s regulatory system formed.
According to reports, the Treasury is completing the final steps on a set of regulations that would let the Financial Conduct Authority (FCA) keep an eye on how crypto firms in the nation operate and advertise. Additionally, there would be limitations on selling cryptocurrency on the UK market from abroad.
Although the study doesn’t go into further detail on those limits, it is conceivable that they would be put into place to compel the companies to register with the FCA. According to FCA Chief Executive Nikhil Rathi, the process is difficult enough as it is, as 85% of the applicants failed the FCA’s Anti-Money Laundering (AML) tests.
The financial services and markets bill includes the guidelines, that are currently being prepared. The significant bill has been presented to the British Parliament which includes, but is not limited to, crypto legislation.
The FT sources claim that although the U.K. launched its consultation on cryptocurrencies in 2021, “fast-moving events” in the sector may cause it to be delayed until 2023.
However, on December 7, the cross-party Treasury Committee will hear from FCA and Bank of England experts about the risks of cryptocurrencies and the “pros and cons” of central bank digital currency (CBDC).
The investigative journalist who covered the investments made by British football fans under the influence of cryptocurrency advertisements will also speak during the session.
Members of the Digital, Culture, Media and Sport Committee launched an inquiry in early November to gather input from the public on the possible benefits and drawbacks of nonfungible tokens, or NFTs, and blockchain technology for the country’s economy.