UK Focuses on Consumer Protection, Novel Crypto Regulations
- The regulations including the financial promotion of stablecoins focus on establishing suitable conditions for crypto service providers.
- The EU has been waiting for the approval of the Markets in Crypto-Assets Regulation (MiCA).
Conforming to the latest reports, the United Kingdom Treasury and the European Union have been stepping forward with novel approaches to the crypto space, introducing regulations on crypto focusing on transparency and consumer protection.
On February 1, the government of the United Kingdom issued proposals for the island nation that intends to balance managing potential consumer and stability risks, together with creating a financial environment suitable for the crypto asset service providers.
Notably, the consultation paper of the proposals “marks the next phase of the government’s approach to regulating crypto assets,” built on the previous HM Treasury proposals that focused on “stablecoins and the financial promotion of crypto assets.”
Interestingly, in the description of the consultation paper, the UK Government stated that the proposals aim at creating suitable conditions for the crypto service providers to establish themselves in the UK, claiming:
The proposals seek to deliver on the ambition to place the UK’s financial services sector at the forefront of crypto asset technology and innovation and create the conditions for crypto asset service providers to operate and grow in the UK, whilst managing potential consumer and stability risks.
In addition, the European Union (EU) is expecting the European Council’s approval of the Markets in Crypto-Assets Regulation (MiCA). Thus, local crypto companies are preparing to embrace the new advances in the EU’s crypto regulation.
Significantly, Financial Minister Andrew Griffith declared in the proposal that the government hopes for clear, and effective regulation in the industry, quoting:
Our view is that this reinforces the case for clear, effective, timely regulation and proactive engagement with industry … This includes a proposal to bring centralized crypto asset exchanges into financial services regulation for the first time, as well as other core activities like custody and lending.
Unlike the UK, in the United States, crypto holding companies and exchanges have been in trouble for the past few months, as the federal and state regulators were accusing crypto companies of fraud and unregistered security offerings, resulting in raised concerns about potential over-regulation.