Rishi Sunak has been elected as the Prime Minister of the UK and has taken the world by storm. The UK government also announced new initiatives on crypto. Equity markets around the world(except India) are witnessing massive sell-offs due to rising costs, weak earnings reports, and recessionary fears. New initiatives in crypto are good news for investors looking to diversify their portfolios.
This article will detail the recent developments of the UK government on crypto and will also encapsulate what these developments mean to the rest of the world.
Crypto advertising regulation
The city and financial services minister of the UK, Andrew Griffith, made amendments to the existing Markets Bill and financial services to ban unauthorized crypto services and regulate crypto ads.
These amendments have been received positively by the crypto industry. The crypto community also wanted the recent proposals to extend beyond Stablecoins which are digital assets pegged to a fiat currency.
The explanatory statement mentioned in the amended Financial Services and Markets Bill states that “ the new clause amends the Financial Services and Markets Act 2000 to clarify that the powers relating to regulated activities and financial promotion, can be used to regulate crypto activities and assets. Crypto assets are defined, but with the option to amend the definition.”
This Act does not allow regulated financial activities to be performed without permission. Regulations will be drafted for crypto activities in this amendment. This act can accelerate the growth of the crypto industry, which desperately wants governments to provide solid guidelines.
Crypto as a regulated asset
UK lawmakers have voted in favor of acknowledging crypto as a regulated asset. Stablecoins have been included in the bill as a mode of payment. Stablecoins are less volatile since they are backed by a fiat currency or other commodity, like gold. These new amendments were first introduced when Rishi Sunak was the finance minister of the Boris Johnson-led government.
Andrew Griffith has stated that the goal is not to give preferential treatment to crypto. He also wants to ensure crypto falls under the scope of regulation.
The recognition of crypto as a regulated asset will help ease the concerns of crypto investors. The UK Treasury wants to use a consultative approach with all stakeholders. The Treasury wants to ensure the new amendments highlight the benefits and risks of investing in crypto.
The way forward
So is it confirmed that crypto will be regulated in the UK? Currently, the rules have not passed through the Upper House of the UK Parliament for consideration of the new regulations. The regulations then need to be approved by King Charles III for them to be converted into law after they pass through the upper house.
The new Prime Minister is known to be a pro-crypto advocate. Rishi Sunak aims to make the UK a global hub for crypto. The first step towards this vision is to make stablecoins, a method of payment.
The UK government is one of the first big economies willing to regulate crypto. Recently, the US government also released guidelines for responsible digital asset development. India is also working on introducing a technologically driven regulatory framework for crypto during the G20 summit next year.
Significant developments are taking place in the crypto industry, with big tech companies like Meta and Google making advances in crypto adoption. Several companies are using NFTs as a marketing tool to increase outreach. It is positive news that big economies are introducing regulations for crypto. These new initiatives facilitate the next wave of technological revolution, with crypto in the spotlight.
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