UK Treasury publishes consultation paper for upcoming crypto regulation

• The UK financial services industry wants to be a leader in crypto regulation.
• The advisory paper covers stablecoins, NFTs and ICOs.
• However, according to Treasury there will be no separate regulatory body for the crypto space.

Her Majesty’s Treasury has published a comprehensive 80-page document Advice sheet For the most anticipated Crypto regulation in the UK.

The article covers a wide variety of crypto topics, from problems with algorithmic stablecoins. Initial Coin Offerings (ICOs), and non-fungible tokens (NFTs). It contains proposals for upcoming crypto regulations in the United Kingdom, which aim to position the UK financial services industry at the forefront of crypto regulations globally.

In general, strict crypto regulatory measures are gaining momentum around the world, especially following the rate at which crypto companies and projects are taking away billions of investors’ dollars. By setting up proper crypto regulation, the UK will soon become a hub for cryptocurrency projects.

Crypto does not have separate regulations

While publishing the consultation paper, the Treasury also announced that there will be no separate regulatory body for cryptocurrencies. The proposed crypto regulations will fall under the UK’s Financial Services and Markets Act 2000 (FSMA).

The Financial Conduct Authority (FCA) will adapt the existing FSMA rules to accommodate the digital assets market.

Once the crypto regulations are set, crypto market players will need to register anew, even if they have done so previously under the FCA licensing regime. But unlike the previous regulatory regime, crypto companies are not required to produce regular market data reports, although crypto exchanges are required to keep the data and make it available at any time.

Contrary to earlier speculation, the UK Treasury has decided not to ban Hierarchical stablecoins. Instead of stablecoins, it has classified them as “non-backed crypto-assets”. As a result, crypto ads should exclude the term “stable” when marketing algorithmic stablecoins.