Crypto industry calls on the UK to think globally as the government closes its consultation on proposed rules
Late last month, on 30th April, the Ministry of Finance officially closed the consultation on what the cryptocurrency regulatory framework should look like. Major "players" generally supported the authority's position, but also urged it to "think more broadly".
The consultation paper was released at the beginning of February. There were responses from a number of major counterparties, including a16z, Binance and Circle.
Andreessen Horowitz warned the UK not to repeat the US mistake. Binance highlighted the risks of "inappropriate" regulation, whilst Circle urged the licensing mechanism for service providers to be as "simple and transparent" as possible.
"This constitutes a welcome step towards establishing regulatory clarity for crypto assets in the U.K. Thoughtfully applied, these frameworks will accelerate the adoption of socially beneficial innovation, while reducing both criminal and financial risks,” said Riccardo Tordera Ricchi, head of policy at U.K." - Riccardo Tordera Ricci of The Payments Association.
Initially, the UK Treasury's plan was to 'fit' cryptocurrencies into the current regulatory framework.
This included
- A licensing regime for VASPs;
- The primacy of the "Financial Services Markets Act";
- Regulatory designation of stablecoins as money;
- Application of "same risk, same regulation" (proportionate control).
On the whole, crypto lobbyists in the UK support this approach. But they are also urging the Treasury to "think outside the box" and use the EU example so as not to leave the UK "in isolation".
This is the MiCA rulebook. Even within the EU, there are cautious calls to "push" other countries to use it.
The results of this consultation will be known in one year. If all goes according to plan, the Treasury is expected to come up with a proposed regulatory framework by early 2024.
