New UK Crypto Regulations Set to Be Announced in Coming Weeks

In the next weeks, the UK Finance Ministry will publish a new regulatory framework for cryptocurrencies, with a focus on stablecoins.

According to sources acquainted with the situation, the new regulations will be favorable to the crypto industry, adding some clarification to the current standards’ ambiguity. Treasury officials have shown a willingness to learn about the crypto industry, according to reports, working with crypto enterprises and trade groups, such as the Gemini exchange.

Gemini creates its own stablecoin that is pegged to the US dollar. Tether, the largest stablecoin in the world, now has a supply of over $80 billion, up $76 billion in two years. Despite the popularity of stablecoins, regulators are concerned that the coins may not be backed by sufficient fiat currency reserves, and that criminals are using them to launder money and engage in other illicit acts.

The UK is following in the footsteps of the Biden administration

The Bank of England called on regulators to minimize cryptocurrencies’ risks to financial stability. The Deputy Governor of the Bank of England penned letters to multiple bank CEOs, citing “increased interest” from banks and investment firms looking to enter different crypto markets. This comes after US president Joe Biden called on varied US Federal Agencies to coordinate efforts on crypto regulation, assigning departments from Treasury to Commerce research projects on various topics, including the launch of a government-backed stablecoin. Brian Deese, who heads up the White House’s National Economic Council, and National Security Adviser Jake Sullivan, said that the new executive order “identifies the administration’s policy priorities, both for cryptocurrencies and any future US Central Bank Digital Currency.”

Many crypto industry insiders lament the lack of similar governmental coordination in the UK, although the government has enlisted the help of the Massachusetts Institute of Technology in researching a central bank digital currency.

The FCA registration deadline is approaching

If they do not register on the Financial Conduct Authority’s crypto-asset register by March 31, 2022, a few crypto firms in the UK may be compelled to shut down. The Financial Conduct Authority in the United Kingdom will only register crypto companies if the FCA determines that their anti-money laundering measures match FCA requirements. The FCA has rejected or withdrew the applications of almost 80% of the businesses it has reviewed.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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