His Majesty’s Treasury published a long-anticipated consultation paper for the United Kingdom’s upcoming crypto regulation. The extensive 80-page document covers a broad range of topics, from the troubles of algorithmic stablecoins to nonfungible tokens (NFTs) and initial coin offerings (ICOs).
As stated by the Treasury, the proposals seek to place the U.K.’s financial services sector at the forefront of crypto and avoid hardline control measures that have gained momentum globally amid the crypto winter.
The Treasury announced that there won’t be a separate regulatory regime for crypto as it would fall under the framework of the U.K.’s Financial Services and Markets Act 2000 (FSMA). The goal is to level the playing field between crypto and traditional finances. However, Britain’s chief financial regulator, the Financial Conduct Authority (FCA), will tailor the existing FSMA’s rules for the digital assets market.
The good news is that, apart from traditional finance, crypto companies won’t have to report their market data regularly. However, the exchanges would be required to keep that data and make it available at all times.
The Treasury deviated from some of its international counterparts and decided not to ban algorithmic stablecoins. It will instead qualify them as “unbacked crypto assets,” not as “stablecoins.” Nevertheless, the crypto promotions would have to exclude the term “stable” from marketing the algorithmic coins.