The UK government is set to use the opportunity presented by Brexit to create new regulations for the crypto industry that will be distinct from those of the European Union.
Andrew Griffith, economic secretary to the UK Treasury, stated that the government had control back of its rulebook, something that it had not had for decades, and thus had the ability to move quickly and proportionately with regard to new regulations.
The EU is currently taking a different path with regards to crypto regulation, with its proposed new regulation on Markets in Crypto-Assets (MiCA) being more detailed. It will focus on stablecoins, central bank digital currencies (CBDCs), threats to financial stability, and consumer protection.
The consultation period for the proposed crypto regulation is set to end on April 30 this year. The new regulation will focus on exchange activities, custody activities, and lending activities, with the aim of making the UK a safe jurisdiction for cryptoasset activity, fostering innovation, and providing firms clarity over the regulatory framework.
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The new regulations will run alongside traditional finance regulation, with the government aiming to regulate the same asset and transaction in the same way wherever possible. However, there are some additional opportunities in the crypto asset or distributed ledger space that the government wants to take advantage of.
UK aims to make itself a global hub for crypto asset technology, with Prime Minister Rishi Sunak expressing this desire last year.
However, the crypto industry should not get too excited about the prospect of comprehensive new regulations for crypto by this time next year, as the government’s review of crypto promotion and marketing laws began in 2020, and the proposed legislation was only published in March of this year.