UK paves the way for cryptocurrencies

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Lawmakers in the UK have voted in favor of recognizing cryptocurrency assets as regulated financial instruments and products in the country – which paves the way for their mass adoption in the country.

The House of Commons, the lower house of Parliament, met last Tuesday for a line-by-line reading of the proposed Financial Services and Markets Bill, which broadly covers the UK’s post-Brexit economic strategy.

Lawmakers considered a list of proposed amendments to the bill, including one proposed by MP, Andrew Griffith, to include cryptocurrency assets within the scope of regulated financial services in the country.

The draft bill already included measures to extend existing regulations to stablecoins focused on payments.

“The essence here is to treat them (cryptocurrencies) like other forms of financial assets, but also to bring them within the scope of regulation for the first time,” Griffith, the minister of financial services, said during the parliamentary session before MPs voted in favour of keeping the amendment in the legislative package.

Hailed by local cryptocurrency industry

The local cryptocurrency industry, which recently welcomed the news of Rishi Sunak’s appointment as the country’s new prime minister, welcomes efforts to give legal recognition to digital assets.

The Markets Bill – and by extension the rules for stablecoins – were introduced during Sunak’s time as finance minister in the Boris Johnson government.

Crypto will come under the existing scope

The cryptocurrency provision, which is based on the definition of “cryptocurrency asset” introduced by new clause 14, “clarifies that cryptocurrency assets could fall within the scope of existing provisions” of the Financial Services and Markets Act 2000 relating to regulated financial activities, Griffith said.

The measures could regulate the promotion of cryptocurrencies and outlaw companies that are not licensed to operate in the country.

“The Treasury will consult on its approach with industry and stakeholders before using its powers to ensure that the framework reflects the unique benefits and risks of cryptocurrency-related activities,” Griffith said.

Equipped to be ready

The inclusion of cryptocurrencies in the scope of the bill will ensure that the country’s Treasury is equipped to respond quickly to developments in the cryptocurrency sector and provide regulation in an “agile” manner that is consistent with the country’s broader approach to regulating the financial services sector, according to Griffith.

There is still a way to go

However, the rules have a long way to go before they become law. The bill must then go through the House of Lords, the upper house of parliament, before amendments are put to final consideration and followed by royal assent from King Charles III.

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