US and UK to Deepen Ties on Crypto Regulation, Says British Regulator

Britain’s top financial regulator, the Financial Conduct Authority (FCA), says the U.S. and U.K. will deepen ties on crypto regulation. “In the past, innovative firms would have been pleading for less regulation. Now they understand and appreciate that rules are there to help provide certainty,” said the British regulator.

US and US to Strengthen Collaboration on Crypto Regulation

The U.K. Financial Conduct Authority’s chief executive, Nikhil Rathi, outlined the FCA’s regulatory goals Wednesday at Peterson Institute for International Economics.

“One area of global focus is crypto, both opportunities and risks,” the FCA chief said. “Currently, our remit is limited to anti-money laundering rules for platforms. We have applied those strict rules as we would to any other firm that wants to operate in the U.K. market.”

The regulator added:

The U.S. and U.K. will deepen ties on crypto-asset regulation and market developments — including in relation to stablecoins and the exploration of central bank digital currencies.

Rathi proceeded to mention that the FCA held “Cryptosprints” earlier this year, which drew nearly 200 participants. “The objective of the events was to seek industry views around the current market and the design of an appropriate regulatory regime,” the FCA explained on its website.

The chief financial regulator described:

Participants told us they wanted a regulatory regime for cryptoassets as a high priority … They also want regulation phased in over time, to allow firms and investors to prepare and for the rules to fit the evolving crypto assets.

“In the past, innovative firms would have been pleading for less regulation. Now they understand and appreciate that rules are there to help provide certainty,” he opined.

The FCA chief noted:

We are demonstrably supporting responsible use cases for the underlying technology while ensuring it is not at the expense of appropriate consumer protection or market integrity.

The U.K. government outlined in May its legislative agenda for the next parliamentary year in the Queen’s Speech. One of the bills aims to support “the safe adoption of cryptocurrencies and resilient outsourcing to technology providers.” Another aims to create “powers to more quickly and easily seize and recover crypto assets, which are the principal medium used for ransomware.”

Furthermore, the British government unveiled a detailed plan in April to make the country a global crypto hub and “a hospitable place for crypto.” The plan includes establishing a dynamic regulatory framework for crypto, regulating stablecoins, and working with the Royal Mint to create a non-fungible token (NFT) to be issued by the Summer.