• The UK announced plans to regulate the cryptocurrency industry within the country.
• The proposed regulations will focus on trading, lending and other activities.
• A framework with clear guidelines for responsible practices is being created to ensure customer safety.
Proposed Regulations in the UK
The United Kingdom has released its plans to regulate the cryptocurrency industry within the country. High levels of volatility and a number of recent failures have exposed the structural vulnerability of some business models in the sector, leading to new set of regulatory guidelines.
Focus on Trading and Lending
Specifically focusing on trading and lending, proposals will place responsibility on cryptocurrency exchanges and firms to define detailed content requirements for disclosure documents, ensuring fair standards. In order to ensure safety of customer funds, a framework with clear guidelines for responsible practices is being created.
Ensuring Customer Safety
The consultation also highlighted necessity for cryptocurrency custodial actors and intermediaries to responsibly facilitate transactions and safely store customer assets. The government seeks to create a response after April 30 2023 after considering feedback from their consultation process. Once legislation is laid, Financial Conduct Authority will consult on its detailed rules for sector.
Commitment to Technological Change
Economic Secretary to Treasury Andrew Griffith remarked that “We remain steadfast in our commitment to grow economy and enable technological change innovation – this includes cryptoasset technology.”
The United Kingdom’s plans seek to create a safe environment for customers by requiring responsible practices from cryptocurrency exchanges, traders and firms alike whilst also enabling technological change through innovation within the sector.