The UK expressed its commitment to becoming a global crypto hub In April 2022, but since then, the crypto market has been hit with a series of major scandals, causing a noticeable increase in crypto regulation efforts around the globe.
According to the Economic Secretary to the Treasury cited by altfi.com, the UK government is setting out ambitious plans to fully regulate crypto asset activities, including toughening rules for crypto trading platforms, as well as supporting a new regime for crypto lending.
He also added that these new proposals aim to place responsibility on crypto trading venues for defining the detailed content requirements for admission and disclosure documents. The end goal is to make sure that crypto exchanges have fair and well-defined standards. Furthermore, the proposals will focus on strengthening rules for financial intermediaries and custodians.
Before this crypto asset regulatory regime is introduced, crypto asset businesses that are currently registered with the FCA for anti-money laundering purposes will be allowed to launch their own promotions.
In essence, this new approach to crypto regulation will be designed to improve consumer protection, while ensuring that crypto asset promotions will be held to equivalent standards as promotions of financial services products with comparable risk profiles.
In January 2023, the UK Treasury has revealed its plans to introduce a digital pound to support the UK’s goal of becoming a cryptocurrency hub. Representatives from the UK government cited by bbc.com revealed that they intend to establish a regime for the wholesale use of stablecoins for payment purposes but that this endeavour is still a long way down the road.
As stablecoins are linked to traditional currencies and assets by design, the digital pound could be used by households and businesses in synergy with cash and bank deposits. It’s worth noting that other central banks around the world are also considering digital currency use, including the European Central Bank, which took a step towards launching a digital version of the euro in July 2021.
Following the decline of high-profile companies such as FTX, as well as the sharp decline in value of bitcoin and other crypto assets, the stability of all cryptocurrencies has been put into question. BBC reported that a public consultation regarding Britain's first general regulatory approach to crypto assets is in the works, particularly in the context of consumer protection.
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