The British Treasury has put forth a proposal in the form of a consultation paper with the goal of controlling crypto trading platforms and lending institutions.
The consultation is open for feedback until the end of April and aims to provide a clear understanding for both consumers and businesses.
According to the Treasury, the regulations are meant to create a sense of assurance and stability.
The Treasury stated that the proposed regulations aim to reduce the major risks of instability and weakness in the crypto sector.
The goal is to bring the sector in line with traditional finance while still fostering economic growth and embracing technological advancements.
Andrew Griffith, the economic secretary to the Treasury, emphasized the need to ensure fair and transparent standards for consumers who are adopting this new technology.
The United Kingdom has taken initial steps towards regulating cryptocurrencies. Previously, the Financial Services and Markets bill was presented to the Parliament, containing regulations for stablecoins and digital settlement assets.
In April 2022, John Glen, who was serving as the economic secretary, expressed his desire for the UK to become a leading center for cryptocurrencies.
Regulation of exchanges has since come into sharp focus following the collapse of disgraced industry heavyweight FTX.
As a matter of fact, the new Treasury plans propose that crypto trading platforms will be responsible for determining the specific requirements for admission and disclosure documents. This will result in fair and robust standards for these exchanges. ‘
The proposals will also result in stricter regulations for financial intermediaries and custodians. As part of these changes, the consultation will gather opinions on enhancing market integrity and consumer protection through a proposed crypto market abuse framework.
It is worth noting that UK Prime Minister, Rishi Sunak, has showed support and a new focus on the cryptocurrency sector. In fact, he explained that the Central Bank digital currencies could be a digital version of money, a bit like a digital banknote that could be used alongside physical notes and coins.
Sunak was chancellor of the exchequer, or head of the treasury, from early 2020 to July 5, when he resigned during a scandal that shook Boris Johnson’s government. During that time, Sunak repeatedly voiced his support for crypto. Speaking in April about proposed regulatory reform related to stablecoins, Sunak said:
“It’s my ambition to make the U.K. a global hub for crypto-asset technology, and the measures we’ve outlined will help to ensure firms can invest, innovate and scale up in this country. This is part of our plan to ensure the U.K. financial services industry is always at the forefront of technology and innovation.”