The Treasury in Britain is putting the final touches on plans for a package that would comprise rules for regulating the crypto space.
This would include limits on foreign crypto firms selling in Britain, along with provisions aimed at dealing with companies that collapse. Likewise, it would also include restrictions on the advertisement of crypto products.
A consultation will shortly be launched by ministers on the new regulatory package. This urgency comes after the collapse of the FTX crypto exchange.
The government has promised to bring some order to what it refers is the ‘wild west’ crypto industry.
Back in April, when Prime Minister Rishi Sunak had still been chancellor, he had stated that the UK could become a global hub for crypto through proper regulation.
He also said that regulation would also give encouragement to businesses in the crypto sector to innovate, invest and expand on the UK shores.
This year, the Financial Conduct Authority (FCA), the regulatory body in the UK, began scrutinizing the money laundering controls implemented by crypto companies based in the country.
However, the regulatory authority does not have power in other areas that can ensure consumer protection, such as false advertising, mis-spelling, mismanagement, and fraud.
If the package is approved, the FCA would then have the authority to oversee crypto in a better way, including overseeing how companies carry out their operations and how they carry out advertisements.
According to those familiar with the Treasury’s stance, the regulations would also come with restrictions on overseas companies when it comes to selling in the UK market.
Moreover, the proposals would also outline just how the crypto companies will wind down their business.
There is a wide-ranging bill focused on financial services and markets that are currently going through the British parliament and the powers will be part of it.
The piece of legislation is Britain’s approach toward financial regulation after Brexit. Amendments had been made to it back in October to add provisions related to cryptocurrency.
In the last few months, there has been a great deal of focus on the ambition of the UK government to make the country a global hub for crypto, given that the market is dealing with one crisis after the other.
Andrew Griffith, a city minister, said in the previous week that regardless of the recent incidents, their ambitions had remained the same.
Speaking at an event, he said that the future of crypto had undoubtedly been thrown into question, but they would not ignore the potential that the underlying technology has to offer.
He added that they would be able to develop a regulatory framework for crypto and stablecoins through the financial services bill.
He also said that the government would consult on world-changing regulations for the crypto sector later this year.
Stablecoins refer to crypto assets that are pegged to a highly liquid and traditional asset, such as the US dollar, or the British pound.
A spokesperson for the Treasury said that the UK wanted to provide companies with a regulatory environment in which they can innovate and still maintain financial stability and uphold standards.
The spokesperson said that this would allow businesses and people to use new technologies safely and reliably. This bill would help them accomplish this goal.