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UK’s New Financial Law to Regulate Crypto, Includes Provisions for ‘Crypto Hub’

« The UK government laid out plans in February to regulate crypto assets and opened its suggestions up for consultation. The consultation period ended on April 30, and specific crypto regulation could come into force within a year or so. »

The United Kingdom has officially passed legislation to regulate cryptocurrencies and stablecoins as part of its broader financial regulatory reforms post-Brexit.

The Financial Services and Markets Bill has become an Act, and includes measures to bring crypto and stablecoins into the scope of regulation.

The new law, dubbed the Financial Services and Markets bill, will grant regulators the authority to establish a tailored framework for the digital asset sector, supporting crypto’s “safe adoption in the UK,”

a press release from the UK Treasury said.

The Act gives regulators the power to supervise crypto and stablecoins, and enables regulation of crypto assets to support their safe adoption in the UK.

The Treasury, Financial Conduct Authority, Bank of England, and the Payments Systems Regulator will soon be able to introduce and enforce rules to regulate the sector.

What are the specific measures included in the Financial Services and Markets Act to regulate crypto

The Act includes provisions for a “crypto hub” which will be regulated by the Financial Conduct Authority.

The hub will be a physical location where crypto companies can come together to collaborate and innovate.

The Act also includes web3 rules, which are designed to support the development of decentralized applications.

The UK government has been consulting on its proposed rules for the sector since February, and the consultation period ended on April.

The Act treats all crypto as a regulated activity and supervises crypto promotions.

The Act is designed to give the UK control of its financial services rulebook, following the UK’s exit from the EU.

The UK is looking to position itself as a “global hub” for cryptoasset technology.

How will the new law impact the crypto industry in the UK ?

The new financial law passed in the UK will impact the crypto industry in the following ways:

  • Regulation of crypto assets: The new law treats all crypto as a regulated activity and supervises crypto promotions.
  • The Treasury, Financial Conduct Authority, Bank of England, and the Payments Systems Regulator will soon be able to introduce and enforce rules to regulate the sector.
  • The Act gives regulators the power to supervise crypto and stablecoins, and enables regulation of crypto assets to support their safe adoption in the UK.
  • Crypto hub: The Act includes provisions for a “crypto hub” which will be a physical location where crypto companies can come together to collaborate and innovate.
  • The hub will be regulated by the Financial Conduct Authority.
  • Impact on UK-based businesses and offshore crypto-exchanges: UK-based businesses as well as crypto businesses located outside the UK (e.g., US or other offshore crypto-exchanges) will need to obtain authorization from the Financial Conduct Authority when the new rules come into force and enhance their systems, controls, and governance arrangements to meet the new increased regulatory standards.
  • Clarity around rules: Crypto companies want clarity around rules and are pushing governments to come up with specific laws aimed at regulating the cryptocurrency industry.
  • The UK government laid out plans in February to regulate crypto assets and opened its suggestions up for consultation.
  • The consultation period ended on April 30, and specific crypto regulation could come into force within a year or so.

The UK is looking to position itself as a “global hub” for cryptoasset technology, and the new financial law is designed to give the UK control of its financial services rulebook, following the UK’s exit from the EU.

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