Key dishes to remember
- The United Kingdom has introduced a bill to regulate cryptographic assets aimed at the protection of consumer and increase investors’ confidence.
- Cryptographic companies in the United Kingdom will have to comply with regulatory standards for transparency and operational resilience similar to traditional financial entities.
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The British government has published a bill to regulate cryptographic assets like Bitcoin and Ethereum, aimed at protecting consumers and strengthening investors’ confidence in the midst of an increasing adoption of cryptography.
Unveiled during the British week Fintech by Chancellor Rachel Reeves, the proposed rules are part of the government’s broader plan for change of change, which aims to position Great Britain as a global center for Finish and innovation of responsible digital assets.
In the new framework, cryptographic companies offering services such as exchanges, custody and brokerage for cryptographic assets must comply with robust standards on transparency, consumer protection and operational resilience – standards currently applied to traditional financial institutions.
“Thanks to our change plan, we make Great Britain the best place in the world to innovate – and the safest place for consumers. Robust rules around crypto will strengthen investor confidence, will support the growth of fintechs and protect people across the United Kingdom, “said Chancellor Reeves.
The legislation aims to approach the sharp increase in the adoption of cryptography across the United Kingdom, where 12% of adults now have digital assets, against only 4% in 2021. This growth, however, exposed thousands of consumers to risky and unregulated platforms and scams.
The new rules will, for the first time, be exchanges and intermediaries will manage digital assets under the British regulatory authority. This will give regulators the tools to target bad players while promoting responsible innovation through clear and enforceable standards.
What to know about the new framework
The bill recently published by the British government introduces a series of legal definitions and regulated activities designed to provide clarity, consumer protection and market integrity.
As part of the proposed framework, providers of cryptographic asset services must, for the first time, be authorized by the Financial Conduct Authority (FCA) to carry out key activities.
These include the exploitation of a trading platform for cryptographic assets, the publication of stablescoins in the United Kingdom, the safeguarding of digital assets on behalf of customers, the facilitation of trading or loans in cryptography as the main or agent, and providing ignition services.
Stablecoins, if they are supported by a currency or fiduciary assets, are also introduced into the lap, although the government has confirmed that it will not yet regulate them under existing payment laws.
Above all, the scheme will apply to companies based abroad if they offer services to British retail customers. Although institutional oriented companies can be exempt in certain cases, any company dealing directly or indirectly with British consumers will be required to guarantee British authorization.
The legislation also includes transitional arrangements, giving existing companies time to apply and, if necessary, to complete their operations in order if the authorization is not granted.
The framework also addresses longtime issues concerning decentralized finance (DEFI). Although there are no specific provisions targeting the DEFI protocols, the FCA will evaluate on a case -by -case basis if a sufficiently centralized entity carries out regulated activities.
Transatlantic cooperation on the growth of digital assets
In addition to interior reforms, the United Kingdom strengthens its international regulatory links.
Chancellor Reeves revealed that the United Kingdom is committed to the United States through the United Kingdom’s regulatory working working group to support responsible growth in digital assets.
The announcement follows high -level discussions in Washington between Chancellor Reeves and the US Treasury Secretary Scott Bessent. The discussions included the proposals of the American SEC Commissioner, Hester Peirce, for a transatlantic sandbox, which would allow companies on both sides of the Atlantic to collaborate in the development of compliant digital securities solutions.
Cooperation is considered a key step towards the harmonization of international standards, the reduction of fragmentation and the encouragement of responsible innovation between the courts.
The government plans to publish its first growth and competitiveness strategy for financial services on July 15, identifying Fintech as a priority sector. The last cryptography legislation will be presented “in the first opportunity”, after an industry consultation on the project of provisions.
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