Cryptocurrency Industry Moves Closer to Regulation as UK Parliament Passes Crypto and Stablecoin Laws
In a significant development for the cryptocurrency industry, the upper chamber of the UK Parliament, the House of Lords, has voted in favor of the Financial Services and Markets Bill (FSMB). This bill aims to recognize crypto as a regulated activity and stablecoins as a means of payment under existing laws in the country. The approval of the FSMB marks a crucial step before the bill can be enacted into law.
The FSMB, a comprehensive legislation comprising over 340 pages, was initially introduced in July with the intention of granting regulators greater authority over the UK's financial system, taking advantage of the post-Brexit environment. While the original bill included provisions to regulate stablecoins under the country's payments rules, subsequent amendments were made as the bill progressed through Parliament. These amendments expanded the scope to include treating all forms of crypto as a regulated activity and introducing measures to oversee crypto promotions.
The primary objective of the FSMB is to empower regulators with the necessary tools to establish robust crypto regulations, a matter that the UK Treasury has been actively consulting on. Andrew Griffith, the Economic Secretary to the Treasury, mentioned in an interview with CNBC in April that new specific rules for the crypto sector could be implemented within a year. This move reflects the UK's ambition to catch up with the European Union, which recently finalized its regulatory framework for Markets in Crypto Assets, with a particular emphasis on stablecoins.
Following its approval by the House of Lords, the FSMB will now proceed to the lower house of Parliament for further deliberations and the agreement on a final version. Once both houses reach a consensus, the bill will be submitted to the monarch for approval, ultimately becoming law. It is important to note that the bill may undergo several iterations between the two chambers before reaching a final agreement.
The approval of the FSMB by the House of Lords signifies the UK government's recognition of the need for comprehensive regulations in the rapidly evolving cryptocurrency industry. By bringing crypto activities and stablecoins under a regulatory framework, the UK aims to ensure consumer protection, promote market integrity, and foster innovation in the digital asset space. This development is expected to provide greater clarity and confidence for businesses and investors operating in the UK's crypto ecosystem, further solidifying the country's position as a leading hub for financial technology and innovation.
As the bill progresses through the final stages of the legislative process, stakeholders in the crypto industry will closely monitor the developments and eagerly await the implementation of the new regulatory framework. The outcome of the FSMB will have far-reaching implications for the future of cryptocurrencies and stablecoins in the UK, shaping the landscape for market participants and potentially influencing regulatory approaches worldwide.