The Financial Conduct Authority (FCA) plan to regulate cryptocurrencies in the UK. This articulate outlines their approach
- Phased Approach: The FCA is taking a step-by-step approach to regulation, starting with financial promotion rules and moving towards a more comprehensive regime by 2026.
- Financial Promotion Rules: These rules, which came into effect in October 2023, require firms to ensure that all crypto advertisements are approved by an FCA-authorized entity and clearly disclose risks to consumers.
- Stablecoin Regulation: New rules for stablecoins are expected to be introduced in 2024-2025, requiring issuers to maintain adequate reserves, implement clear redemption rights, and ensure robust custody practices.
- Comprehensive Regulatory Regime: By 2026, the FCA aims to establish a comprehensive regulatory framework for cryptoassets. This will involve firms passing through a regulatory gateway to demonstrate compliance with all FCA rules.
- Consumer Protection: The FCA’s primary focus is on protecting consumers from the risks associated with crypto investments, such as fraud and market manipulation.
- Industry Engagement: The FCA is actively engaging with the crypto industry to gather feedback and shape the regulatory regime.
Overall, the FCA’s roadmap aims to bring cryptocurrencies under a more regulated framework, ensuring that consumers are adequately protected and that the market operates fairly and transparently.
The FCA’s next steps to regulate crypto – The Compliance Digest
