Crypto Regulation | Nov 1, 2023
Herbet Smith Freehills Unpacks the UK’s Progressive Stance on Cryptoasset and Stablecoin Regulation
The UK government has recently published a series of policy papers, shedding light on its future regulatory approach towards cryptoassets and fiat-backed stablecoins.
Herbert Smith Freehills law firm, expertly outlines the UKs forward-thinking regulatory framework and explores the delicate balance between nurturing innovation while ensuring financial integrity in the digital asset space.
Fiat-Backed Stablecoin Regulation (Phase 1)
- The UK’s Financial Services and Markets Act 2023 has set the stage for the regulation of fiat-backed stablecoins, with secondary legislation expected to be introduced by early 2024.
- This legislation aims to bring activities related to fiat-backed stablecoins within the regulatory perimeter, empowering the Financial Conduct Authority (FCA) to oversee these digital assets.
- The government’s policy update delineates the objectives of this upcoming legislation, ensuring a clear regulatory framework for stablecoins.
Wider Cryptoasset Regulation (Phase 2)
- The UK government has also published its response to the February 2023 consultation on the broader cryptoasset regulatory regime.
- This response clarifies and modifies some of the original proposals based on feedback received.
- The implementation of this broader regulatory framework is anticipated to commence post-2024, following the completion of Phase 1.
See: Managing the failure of systematic digital settlement asset firms‘ (including stablecoins)
Further Notes:
- The government acknowledges the need for a precise legal mechanism to define and categorize cryptoassets, ensuring clarity for industry stakeholders.
- The UK’s regulatory approach may diverge from the EU’s MiCA and other jurisdictions, as portfolio management and investment advice on cryptoassets will not be regulated at this stage.
- Mining will remain unregulated, while the government plans to expedite exploratory work to clarify the regulatory treatment of staking activities.
See: FCA’s Expectations for UK Cryptoasset Businesses and the Travel Rule
- Delineation between Phases 1 and 2: The government provides greater clarity on the definitions and distinctions between regulated stablecoins and broader cryptoassets.
- Firms dealing directly with UK retail consumers will be required to obtain authorization, irrespective of their location.
The UK government’s policy papers reflect a thoughtful and progressive approach to cryptoasset and stablecoin regulation, balancing innovation with consumer protection and financial stability.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada’s Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
Related Posts
- SEO Powered Content & PR Distribution. Get Amplified Today.
- PlatoData.Network Vertical Generative Ai. Empower Yourself. Access Here.
- PlatoAiStream. Web3 Intelligence. Knowledge Amplified. Access Here.
- PlatoESG. Carbon, CleanTech, Energy, Environment, Solar, Waste Management. Access Here.
- PlatoHealth. Biotech and Clinical Trials Intelligence. Access Here.
- Source: https://ncfacanada.org/uks-future-crypto-and-stablecoin-regulation/
- :has
- :is
- :not
- 1
- 10
- 150
- 200
- 2018
- 2023
- 300
- 32
- a
- Act
- activities
- administration
- advice
- affiliates
- aims
- also
- alternative
- alternative finance
- and
- Apply
- approach
- artificial
- artificial intelligence
- AS
- asset
- Assets
- At
- authority
- authorization
- Balance
- balancing
- based
- BE
- become
- between
- blockchain
- BRIDGE
- bring
- broader
- businesses
- by
- cache
- Canada
- clarity
- clear
- closely
- coming
- community
- completion
- Conduct
- consultation
- consumer
- Consumer Protection
- Consumers
- create
- Crowdfunding
- crypto
- cryptoasset
- cryptoassets
- cryptocurrency
- dealing
- decentralized
- define
- definitions
- digital
- Digital Asset
- Digital Assets
- directly
- distributed
- Diverge
- Early
- ecosystem
- Education
- empowering
- engaged
- ensure
- ensuring
- entities
- Ether (ETH)
- EU
- expectations
- expedite
- explores
- Failure
- FCA
- February
- feedback
- finance
- financial
- financial innovation
- Financial Market
- financial services
- financial stability
- fintech
- Firm
- firms
- fmi
- following
- For
- Force
- forward-thinking
- Framework
- from
- funding
- funding opportunities
- future
- get
- Global
- Government
- greater
- helps
- High
- http
- HTTPS
- image
- implementation
- in
- Including
- industry
- information
- Infrastructure
- Innovation
- innovative
- Insurtech
- integrity
- Intelligence
- intends
- into
- introduced
- investment
- irrespective
- ITS
- Jan
- jpg
- July
- Key
- Law
- law firm
- Legal
- Legislation
- light
- likely
- LINK
- location
- manage
- management
- Market
- Markets
- max-width
- mechanism
- member
- Members
- MiCA
- modified
- more
- networking
- nick
- Notes
- nov
- nurturing
- objectives
- obtain
- of
- on
- opportunities
- or
- original
- Other
- outlines
- oversee
- papers
- partners
- payments
- peer to peer
- perks
- phase
- plans
- plato
- Plato Data Intelligence
- PlatoData
- please
- policy
- portfolio
- portfolio management
- precise
- progressive
- projects
- Proposals
- protection
- provides
- published
- Publishing
- received
- recently
- reflect
- regime
- Regtech
- regulated
- Regulation
- regulatory
- related
- Releases
- remain
- required
- response
- Results
- retail
- Rule
- s
- secondary
- Sectors
- Series
- service
- Services
- set
- settlement
- smith
- some
- Space
- special
- Stability
- stablecoin
- stablecoin regulation
- Stablecoins
- Stage
- stakeholders
- Staking
- stance
- Stewardship
- systemic
- Takeaways
- that
- The
- the UK
- their
- These
- this
- thousands
- to
- today
- Tokens
- towards
- Tower
- travel
- Travel Rule
- treatment
- Uk
- UK government
- UKs
- Unsplash
- upcoming
- Update
- vibrant
- Visit
- while
- will
- with
- within
- Work
- works
- zephyrnet