As the cryptocurrency industry continues to grow in adoption and bad actors, the market has yawned for regulation as never before seen, especially with the recent accident that affects the crypto market negatively but could have been curbed with proper regulation.
According to the latest update, the UK is willing to take the first step among other global leaders to bring these regulations to the cryptocurrency industry.
In an industry consultation held on Tuesday, the UK issued a plan to regulate the crypto industry. The UK government has set out a number of measures to control the crypto-related business sector just as traditional financial companies are being supervised.
UK Proposes Targeted Sectors To Regulate
Aspects of the main targets proposed to be regulated by British government including sectors that allow financial intermediaries and custodians to store crypto assets on behalf of clients. Since this is the main idea behind most of the crypto business crashes last year, including FTX, the UK wants to enable strict regulation of risky loans among many crypto companies.
The proposal aims to focus on consumer protection and reduce lending activity as well as the pursuit of “the world’s first regime strengthening rule on lending.” crypto assetswhile enhancing consumer protection and the company’s operational resilience,” according to a statement late Tuesday.
Andrew Griffith, economic secretary to the Treasury, noted in a statement. “We remain steadfast in our commitment to grow the economy and enable technological change and innovation – and this includes crypto asset technology. But we must also protect consumers who use this new technology – ensuring strong, transparent, and fair standards.”
In addition, the proposal aims to impose strict transparency requirements on crypto exchanges in order to enforce the publication of relevant details and proper layout approval requirements for digital trading assets.
Because there are more bankruptcies in the crypto industry than just loan services and lack of transparency, the UK government is also targeting the crypto advertising sector allowing only companies to own it. Financial Conduct Authority (FCA) registration to continue promotion while the broader crypto regime is being established.
Law Is Cool But It Takes Time
Regulation is not a one-person job, as it must go through a number of agreements and procedures that must be followed. CNBC stated, “It may take years before the measure is approved by Parliament.” Simply put, many things still need to be done before the finalization of the proposal.
Meanwhile, the Financial Services and Markets Bill, responsible for legalizing cryptocurrency assets as a regulated product, still has not appeared in parliament. The legislation aims to make the country’s financial industry more aggressive after Brexit.
Regardless, the UK took the first step among other world leaders to regulate the crypto industry is still necessary, according to industry experts. CEO of Zodia Custody, Julian Sawyer, toward CNBC, “Having a regulatory roadmap or regulatory direction of travel would be very beneficial for the UK in terms of becoming a crypto hub.”
While regulation in the crypto industry is only expected to become the new normal, the cryptocurrency market is still quietly hovering above the $1 trillion mark.
At the time of writing, the global cryptocurrency market capitalization sits at $1.84 trillion, close to the $2 trillion mark Bitcoin (BTC) and Ethereum (ETH) rose 1.8% and 1.2%, respectively, over the past 7 days.
Featured images from Unsplash, Charts from TradingView