The UK has now passed into law the Financial Services and Markets Bill, which recognizes trading of cryptos and stablecoin as well as its safe adoption.
The new law got a Royal Assent from King Charles 111 on June 29, presenting a major milestone into shaping the UK’s financial regulatory framework. The new Act is meant to enhance competitiveness in the financial sector as well as support consumers and businesses in the UK.
A milestone for crypto
Royal Assent is a procedural stage after lawmakers agree on a Bill, making it an Act of Parliament. In this specific instance, the Bill was approved on 19 June, in the upper chamber of Parliament.
Economic Secretary to the Treasury Andrew Griffith, described this as a landmark development giving the UK control of its financial “rulebook.”
“2023 is proving to be a banner year for reforming our financial services. This landmark piece of legislation gives us control of our financial services rulebook, so it supports UK businesses and consumers and drives growth,” he said in a statement.
Included in the new law are measures to bring crypto assets and stablecoin into the scope of regulation.
It states that it “enables the regulation of crypto assets to support their safe adoption in the UK.” Amendment to the Bill included provisions to allow crypto as regulated financial instruments in the UK.
Key stakeholders such as the Bank of England, Payments Systems Regulator and the UK’s Treasury will soon be able to enforce rules to regulate the sector.
A hub for crypto companies
Now that the Bill has been approved into law, it is expected to attract more crypto companies in the UK from the USA. According to CryptoPotato, crypto companies in the US are unsettled as the US SEC launched an outright attack on the industry with lack of clarity on regulation.
This development could signal the UK’s long-term aspiration of becoming a global hub for crypto innovation.
Co-founder of blockchain developer Sei Labs, Jeff Feng told Yahoo Finance that the UK “might be positioning itself as the ‘Singapore of Europe’ when it comes to crypto, aiming to attract entrepreneurs and compete with other crypto-friendly European countries.”
“The formal recognition of cryptocurrencies in the UK represents a significant advancement for the broader crypto industry,” commented Feng by email.
“It serves as an acknowledgement of the growing legitimacy of digital assets, something that is increasingly becoming crucial as countries worldwide compete for supremacy in the crypto and tech space.”
According to recommendations published on Wednesday by the Law Commission of England and Wales digital assets inclusive of cryptocurrencies and non fungible tokens should be classified as a new category of “personal property rights.”
The Law Commission also recommends the “creation of a bespoke legal framework that better facilitates the entering into, operation and enforcement of collateral arrangements relating to crypto-tokens and crypto-assets.”
Our reforms aim to provide greater legal clarity and encourage technological innovation.
— Law Commission (@Law_Commission) June 28, 2023
Setting standards for financial services
According to the UK government, the Act will ensure an open and dynamic financial center, offering the highest regulatory standards and protecting those that use financial services in the country.
“For the first time in decades, the UK has full control of its own financial services regulation. This Act will protect people who rely on financial services day-to-day and boost the competitiveness of our dynamic global financial center.
“It marks a major milestone in our plans to develop a regulatory regime that works for the UK and helps us seize new opportunities in the global economy,” said chief secretary to the Treasury John Glen.