UK Treasury Commitee Publishes Inquiry Into Crypto-Assets07/13/2022The UK Treasury Commitee has launched an inquiry into the role of crypto-assets in the U.K. and their regulatory framework. The inquiry poses questions on a range of subjects, including the likelihood of digital currencies (e.g., stablecoins) replacing traditional fiat currencies, the risks and opportunities posed by crypto-assets and the environmental implications of crypto-asset technology, as well as a range of questions on the optimal approach to regulation for the industry. Responses should be submitted by September 12, 2022. The inquiry comes in the wake of another period of volatility in the crypto markets, which has drawn attention to some of the risks of investing in these products.
The U.K. is gradually expanding the ambit of its regulatory framework for crypto-assets. The sale to retail clients of investment products referencing crypto-assets is now prohibited in the U.K. (effective from January 6, 2021) and crypto-asset businesses that began operating in the U.K. after January 9, 2020 must obtain full registration with the U.K. Financial Conduct Authority for anti-money laundering purposes before they can begin trading. HM Treasury has announced that it plans to bring certain activities associated with stablecoins used as a means of payment within the U.K. regulatory perimeter and that certain crypto-assets will also be brought within the purview of the financial promotion rules. The FCA has published its final amendments to other areas of the financial promotion regime, but can only bring in its rules related to crypto-assets once the legislative change is made.
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