The FCA has come under widespread criticism in recent months for stifling the innovation of FinTech – an industry in which the UK supposedly wants to be a leader. But as crypto is quickly becoming more widely adopted, delays in implementing regulation is causing the UK to fall behind on this ambition. For example, in the US, stablecoins are already being used to facilitate trading, lending, or borrowing other digital assets. As a result, they are moving to craft regulations to support faster, more efficient, and more inclusive payment options. The move to regulate the industry comes at a crucial time for the UK economy. Rishi Sunak, Chancellor of the Exchequer, said in his statement: “We want to see the [cryptocurrency] businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively, we can give them the confidence they need to think and invest longterm.” What is the proposed regulation? While no official regulation has been published yet, the British Treasury published a response to consolidation and called for evidence, which considers the following: • An amended e-money framework that can deliver a consistent framework to regulate stablecoin issuance and the provision of wallets and custody services. • An amendment to Part 5 of the Banking Act 2009 to include stablecoin activities to apply in cases where the “the risks posed have the potential to be systemic, and so the threshold for the Bank of England supervision is met”. • An amendment to the Financial Services (Banking Reform) Act will mean stablecoin based payment systems will be subject to appropriate competition regulation by the Payment Systems Regulator. What does this mean for crypto in the UK? Establishing a regulatory environment for stablecoins used as payF i nanc i a l Innov a t i on & F i nTech 58 Finance Monthly.
RkJQdWJsaXNoZXIy Mjk3Mzkz