A bill that aims to regulate cryptocurrencies and stablecoins in the UK has been approved by King Charles III. Dubbed the Financial Services and Markets Act 2023, the new law classifies the trading of cryptocurrencies as a regulated activity and brings stablecoins under the scope of payment rules.
The Act gives regulators more power to govern financial systems, including the digital assets industry. The bill, which got the approval of the UK parliament's upper house last week, permits regulators, including the Financial Conduct Authority (FCA), the Bank of England, and the Payments Systems Regulator, to introduce new rules in the digital asset sector.
Unlocking Innovation
Andrew Griffith, the Economic Secretary to the Treasury, said that the new law presents an opportunity to tailor the regulation of financial services to the UK market as the country is no longer part of the European Union (EU). Additionally, the law is expected to enhance the scrutiny and accountability powers of financial regulators.
"This landmark piece of legislation gives us control of our financial services rulebook. It supports the UK businesses and the consumers, and drives growth," Griffith said in a statement. "By repealing old EU laws set in Brussels, it will unlock billions in investment cash that can unlock innovation and grow the economy."
Through the new legislation, the UK expects to promote safe adoption of cryptocurrencies in the country. It further expects to create a framework to facilitate the testing of new technologies like blockchain in the financial markets, the HM Treasury elaborated in the statement.
UK Curbs Crypto Promotions
The original version of the comprehensive bill was introduced in July last year and was proposed to regulate stablecoins under the payments services rules. However, as the bill progressed through parliament, the amendment to treat crypto trading as a regulated activity was introduced. Additionally, measures to control the promotion of digital assets were later included.
Griffith said in an interview with CNBC in April that the specific rules for cryptocurrencies could be introduced within a year. According to Griffith, this step is part of an agenda to establish the UK as a global hub for cryptocurrency technology.
Meanwhile,Finance Magnatesreported that the EU has passed the Markets in Crypto-Assets (MICA) regulation in May, making Europe the first jurisdiction to introduce comprehensive laws on digital assets. MiCA aims to protect European investors, promote environmental sustainability, and prevent money laundering in the cryptocurrency industry.
This article was written by Jared Kirui at www.financemagnates.com.
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