The U.K. is working on tighter regulations for cryptocurrency-asset firms, according to a consultation response published Oct. 30.
The announcement covers rules first proposed in February that would require crypto-asset firms to be authorized by the Financial Conduct Authority.
"The government's proposed measures have been informed by recent market events — including the failure of FTX — which reinforce the case for effective regulation and sector engagement," the Treasury said in the document today. "The UK remains committed to creating a regulatory environment in which firms can innovate, while crucially maintaining financial stability and clear regulatory standards so that people can use new technologies both reliably and safely," it said.
Currently, crypto businesses providing services with digital tokens just have to follow FCA anti-money laundering regulations. The next step is legislation enabling the new rules.
Industry trade group CryptoUK said in a separate statement that it was "encouraged that HMT has listened to industry concerns," and welcomed the acknowledgment that "the government's ambition to make the U.K. a global hub for crypto-asset technologies remains steadfast."
By early 2024, the government also plans to have legislation for regulation of stablecoins, a subset of crypto assets pegged in price to a particular asset, typically a fiat currency like the pound sterling or dollar. That is in contrast to the European Union's separate new regulatory framework, Markets in Crypto-Assets.
