The UK has made significant progress in legitimizing cryptocurrency as a regulated activity, with the recent approval of the Financial Services and Markets Bill (FSMB) by the House of Lords. The bill, spanning over 340 pages, was initially introduced in July to capitalize on Brexit freedoms and grant regulators more power over the UK financial system. Various amendments have since been added, including proposals to regulate all cryptocurrencies and measures to supervise crypto promotions.
The primary purpose of the FSMB is to provide UK regulators with the necessary authority to establish rules for the emerging crypto sector. The Treasury, the government’s finance arm, has been seeking consultation on these rules, with new specific guidelines for the industry expected to be implemented within the next 12 months. According to Economic Secretary to the Treasury Andrew Griffith, who spoke to CNBC in April, the UK is looking to keep pace with the European Union, which has recently finalized its Markets in Crypto Assets Regulation (MiCA). The EU regulation predominantly focuses on stablecoins.
This potential regulation of cryptocurrencies can be lauded for providing increased legitimacy and consumer protection to participants in the market. However, such changes may also pose potential drawbacks, such as stifling innovation and increasing the barriers to entry for smaller players. Furthermore, the increased scrutiny and oversight in the crypto space might also cause reluctance among crypto enthusiasts, who value the privacy and decentralized aspects of the technology.
As the FSMB enters its final stages, awaiting approval from the lower house of Parliament, the debate surrounding the benefits and drawbacks of regulating cryptocurrencies continues. If the bill is approved, it will be sent to the King to be passed into law. Until an agreement is reached, the document may be transferred between the chambers of Parliament repeatedly.
In conclusion, the progress of the Financial Services and Markets Bill in the UK Parliament showcases the government’s willingness to engage with and recognize the importance of cryptocurrency in today’s economy. While the impending regulation offers increased legitimacy and consumer protection, it also raises concerns about innovation and privacy within the industry. As the bill advances through the legislative process, market participants and enthusiasts alike will be observing with keen interest to see how the UK navigates the complex landscape of cryptocurrency regulation.
Source: Coindesk
