Here's what you need to know
In a significant effort to significantly develop the cryptocurrency industry, the UK House of Lords has passed the Financial Services and Financial Markets Act, signaling the country's commitment to regulating cryptocurrencies and their providers. This legislation, introduced in July 2022, has the potential to have a considerable impact on cryptocurrency markets. With support from the House of Lords, it is now one step closer to becoming law.
Originally designed to take advantage of post-Brexit opportunities and empower financial regulators, the law underwent changes as it progressed through Parliament. In its first phase, it focused on regulating stablecoins under national payment rules, but has evolved to encompass all cryptocurrencies as regulated activities, accompanied by measures to oversee crypto promotions.
This law, part of the government's "Regulatory Framework for the Future" review, represents a comprehensive agenda for significant transformation in the financial services sector. Its aim is to repeal and replace laws and regulatory requirements that have resulted from EU measures after Brexit.
The provision of the law regarding the regulation of cryptoassets and their providers excites the crypto sector. This revolutionary move in British law aims to introduce regulatory oversight into an industry known for its laissez-faire approach. The goal is to bring greater transparency and stability to the volatile cryptocurrency markets.
In addition, the law addresses the regulation of "Buy Now, Pay Later" products and their suppliers, focusing on improving consumer protection. At the same time, it ensures that access to cash is maintained, recognizing its importance for demographic segments that still rely on physical currency.
The law also introduces the possibility of mandatory reimbursement for victims of authorized payment scams (APP), a problem present in the UK. Aiming for tighter controls on those who approve financial promotions for others, it aims to promote greater accountability in the financial ecosystem.
More consultations are ongoing on the provisions of the law as it moves through the parliamentary process. Certain aspects are expected to spark intense debate, while other provisions can be quickly integrated into the regulatory system.
The UK's commitment to cryptocurrency regulation reflects a wider global trend to establish crypto oversight. With greater regulatory clarity and measures, stakeholders anticipate a more mature and secure environment for the future of digital assets.