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UK set to unveil a new crypto regulatory regime

By:
on Mar 28, 2022
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  • The UK government is set to introduce a new crypto regulatory framework.
  • This framework will pay attention towards stablecoins.
  • The framework will provide clarity about cryptocurrency regulations.

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The UK is expected to introduce a fresh set of rules to regulate the cryptocurrency sector. The regulations will focus on stablecoins. Stablecoins are cryptocurrencies backed by other assets such as fiat currency, commodities or other coins.

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UK to launch a new regulatory regime for crypto

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The Finance Minister in Britain, Rishi Sunak, will announce a new regulatory framework for the UK crypto market. A CNBC report noted that the regulatory framework is in its final stages.

CNBC referred to sources familiar with the matter that said the regulatory framework could be friendly. If these regulations are introduced, it could help offer regulatory clarity, which has been lacking for a long time. The sources noted that Treasury officials were open to understanding more about the crypto sector, especially stablecoins.

CNBC also stated that the UK Treasury Department was already in consultation with some players in the crypto sector. These players include Gemini, one of the popular cryptocurrency exchange platforms. Gemini has its own stablecoin, whose value is pegged to the US dollar.

Tether (USDT) is currently the largest stablecoin with over $80 billion in circulating supply. However, the company has been under scrutiny regarding whether USDT is fully backed by USD reserves. Stablecoins are also raising concerns over their effects on financial stability, given their growing popularity.

The UK crypto sector is currently regulated by the Financial Conduct Authority (FCA). This organization is tasked with licensing firms operating in the crypto space and protecting crypto investors.

Europe’s crypto regulations are also underway

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The European Union is also formulating clear regulations for the crypto sector. The EU is planning to implement MiCA regulations that will regulate virtual assets. These regulations will help clarify how crypto assets will be regulated in the EU. EU Lawmakers will also determine the institution tasked with regulating the crypto market.

There were speculations about the EU banning proof-of-work cryptocurrencies such as Bitcoin. However, last week, the lawmakers voted against such a ban. Therefore, the MiCA regulations will continue without a PoW ban.

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