UK Treasury releases final proposals for crypto asset regulation

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By BitcoinWiki News

Key Takeaways:

– The UK government has responded to its consultation for crypto asset regulation.
– The final proposals aim to bring crypto asset activities into the regulatory perimeter for financial services.
– Firms dealing with UK retail consumers must be authorized, regardless of their location.
– Crypto exchanges will need to be authorized by the UK’s Financial Conduct Authority and meet admission standards and disclosure requirements.
– The regulation does not cover decentralized finance (DeFi) at this stage, but international efforts will be supported.
– The proposed rules will be integrated into existing UK market law, not as a separate regulatory regime.
– The UK aims to be a leader in crypto asset technology and innovation while managing consumer and stability risks.

Title: UK Government Finalizes Crypto Asset Regulation Proposals, Excludes DeFi in Current Phase

The UK government has released its final proposals for crypto asset regulation, incorporating insights from industry stakeholders and recent market events. The new regulations aim to bring various crypto asset activities under the regulatory perimeter of financial services, with a focus on authorizing firms that deal directly with UK retail consumers.

Main Points:
1. Authorization Requirement: The government has proposed that crypto asset firms engaging with UK retail consumers must be authorized by the UK’s Financial Conduct Authority. This move ensures that these firms operate within the regulatory framework, regardless of their geographic location.

2. Admission Standards and Mandated Disclosures: Crypto exchanges will be obligated to meet specific requirements for admission standards and disclose necessary information when listing new assets. These measures aim to enhance transparency and protect retail consumers.

3. Exclusion of DeFi: The final proposals do not include regulations for decentralized finance (DeFi). The report acknowledges that attempting DeFi regulation at this stage would be premature and ineffective. Instead, the UK government plans to collaborate with international entities like the Financial Stability Board and other standard-setting bodies to inform future domestic regulatory frameworks for DeFi.

4. Integration into Existing Market Law: The proposed regulations will be incorporated into existing UK market legislation, rather than existing as a standalone regime. The consultation process suggests adapting traditional finance custodian frameworks for crypto asset services.

5. Supporting Crypto Innovation: The UK government’s objective is to position the country as a leading hub for crypto asset technology and innovation in the financial services sector. By fostering an environment that manages risks for consumers and stability, the proposals aim to enable crypto asset service providers to flourish in the UK.

The UK government has finalized its proposals for regulating crypto assets, requiring authorization for firms engaging with UK retail consumers. While the regulations focus on traditional financial services, DeFi regulation is not included in the current phase. The aim is to create a supportive environment that balances consumer protection and innovation in the crypto asset industry.

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