Opinion of: Azariah Nukajam, head of regulations and compliance with Gemini
The United Kingdom is at a critical moment in its approach to the space of rapid digital assets.
Having solidified as a financial power in the modern world economy, the government has often spoken of making the United Kingdom a “first center of global cryptography”. The development of policies was however slow, fragmented and insufficiently ambitious.
The hesitation involves costs for a sector as fast as crypto and decentralized finance (DEFI). Capital, talents and innovation are very mobile. The United Kingdom risks losing ground against more proactive jurisdictions such as the United States and Singapore.
To preserve its competitiveness, the government must match its ambition with action while learning international peers.
Bold ambitions and slow delivery
The Financial Conduct Authority (FCA), the UK financial services regulator and the British government should work hand in hand to support space growth and ensure that these rules are both respected and achievable. The British government is responsible for setting up the legal framework, while the FCA implements and applies these rules, providing advice and deadlines on how to join them.
Clear and progressive legislation is essential for any healthy market. A contrasting example is the previous American administration, which adopted an “application regulation” approach to regulate the cryptography industry, without a clear agency defining the rules by which the cryptographic industry was governed.
The British government recently proposed a statutory instrument project (SI), a avant-garde framework to regulate cryptographic assets, in the hope of creating a friendly environment in the United Kingdom. Theoretically, this is an important step for the digital asset sector of the United Kingdom. But in practice, it is only a modest step for many reasons.
The current discussions between the participants of the industry systematically put the pace of reform The pace of the reform; The institutions have long waited for the clarity of the United Kingdom’s position on the cryptographic products listed, and in August, the FCA opened access to detail to negotiated tickets in exchange for crypto. Meanwhile, the funds negotiated in exchange for increasingly popular crypto (ETF) remain prohibited.
In addition, concerns about the lack of definition of regulatory boundaries for DEFI – a rapid growth segment of industry – make it difficult for cryptographic companies to navigate the DEFI and centralized finance (CEFI) perimeter.
In relation: 40% of British crypto users declare blocked payments in the middle of an increase in “anti-consumption” practices
The proposed legislative and regulatory rules also require considerably higher reporting requirements, team compliance teams in charge and undergoing the confidentiality philosophy associated with decentralization. Automated tax reports in HMRC (the United Kingdom, payments and customs of the United Kingdom) are an example, which, according to many, will discourage investors from using an exchange based in the United Kingdom and push them to jurisdictions with more favorable tax offers.
Unless the government takes the comments of the industry seriously and does not adapt to the creation of a holistic framework balancing backups and innovation of consumers, it risks being left in the global cryptography race.
A committed regulator
On the other hand, the FCA has adopted a more structured approach and engaged in the cryptography sector of the United Kingdom, demonstrating that it is willing to engage with cryptographic companies to prevent market abuses and protect consumers while remaining competitive.
Unlike the government, which often seems reactive, the FCA has been proactive: the accommodation of round tables, the contribution of the industry for the conversion and the establishment of a progressive approach to regulatory development with its cryptographic roadmap. They also provided more detailed advice on the effective implementation of specific rules, including consumer protection, market integrity and responsible innovation support. Even if market players do not agree with the FCA proposals, this has a lot in an industry that values transparency and predictability and is essential to give confidence to companies and investors in British cryptography.
Nevertheless, the challenge lies in the FCA, ensuring that its rules are proportionate. While large companies may be able to absorb heavy compliance charges, smaller startups may have trouble complying, which will dissuade them from operating from the United Kingdom.
A path to cryptographic leadership
The good news is that it is still time to change course. Other jurisdictions have already changed more decisively with their cryptographic regulations. The Crypto-Sets Market Market Market Regulatory framework gives companies clear and complete rules to operate inside, acts of clarity and genius have put the United States on the path of global domination of cryptography, and the monetary authority of Singapore introduced a rigorous license process alongside bins of regulatory sand and pillar approaches. Although an advantage of the second engine will allow the United Kingdom to learn from the experiences of others, this may also be left behind if it does not act quickly to respond to industry concerns.
The regulator has thrown a promising base, and thanks to greater coordination with the government, daring ambitions and precise implementation, the United Kingdom can throw a fertile ground to become a leader in the global cryptography economy.
Opinion of: Azariah Nukajam, head of regulations and compliance with Gemini.
This article is for general information purposes and is not intended to be and must not be considered as legal or investment advice. The points of view, the thoughts and opinions expressed here are the only of the author and do not reflect or do not necessarily represent the opinions and opinions of Cointellegraph.
