In a pivotal move shaping the future of cryptocurrency regulation in the UK, a bill empowering regulators to oversee crypto and stablecoins has received royal assent. This administrative step marks the final stage of the legislative process, culminating in the enactment of the Financial Services and Markets Bill. This bill was previously approved by the upper chamber of Parliament.
Enhancing Regulatory Powers
Following the UK’s exit from the EU, the Act bolsters regulatory control over the financial services rulebook. It enables effective regulation of crypto assets, supporting their safe adoption within the UK, according to a statement from the Financial Services Minister.
Debated in Parliament since its introduction in July 2022, the bill underwent amendments, which now treat all crypto as a regulated activity and oversee crypto promotions. Moreover, the bill brings stablecoins under the ambit of payment rules.
Supervision by Major Financial Bodies
The Act empowers the UK’s Treasury, the Financial Conduct Authority, the Bank of England, and the Payments Systems Regulator to establish and enforce rules regulating the sector. The Treasury has been formulating these rules since February 2023, aligning with the Conservative Government’s ambition to transform the UK into a hub for cryptocurrency.
The UK’s Approach to Crypto Regulation
As of June 2023, the UK’s Financial Conduct Authority introduced new advertising rules for crypto assets, aiming to ensure that users understand the associated risks. According to these rules, companies involved in cryptocurrencies need to make sure their customers have sufficient experience and knowledge before investing in crypto.
Crypto promotions are now required to include a series of risk warnings. Advertisements need to be transparent, fair, and not misleading. These rules fall within a government legislative package aimed at incorporating crypto promotions into the regulator’s scope.
Though investing in crypto remains a personal decision, the FCA has cited data indicating that many users regret impulsive decisions, especially those not backed by thorough research. The objective of the new rules is to provide individuals with the necessary time and risk warnings to make informed choices. FCA research shows a significant rise in crypto ownership, with an estimated 10% of the 2,000 surveyed individuals revealing they own crypto.
