UK Government Asks Crypto Industry to Provide Insights on Its Regulatory Approach

Her Majesty’s Treasury Department in the UK has issued a document listing a number of suggestions for the crypto community. With the consultation, the Ministry of Finance is introducing a “regulatory approach for crypto assets and stablecoins” for 2021 after the turbulence at Brexit.

Special focus on stablecoin regulation

According to the official announcement, the consultation is mainly aimed at stable coins to collect investment and wholesale usages. The Treasury Department expects to gather insights from the “industry and stakeholders” in the crypto space by March 21, 2021.

In 2018 the UK government set up an interagency task force to assess the economic impact of a rapidly evolving cryptoasset market.

With this motivation, the Treasury Department wants to ensure that its regulatory framework is designed to take advantage of new technologies, support innovation and competition, while reducing risks to consumers and stability.

The Ministry of Finance explains in the document why a special focus was placed on stable coins after the start of the task force:

Two years later, the landscape is changing rapidly. So-called stablecoins could pave the way for faster and cheaper payments and make it easier for people to pay for things or to save their money. There is also increasing evidence that DLT could have significant benefits for capital markets and potentially fundamentally change the way they work.

The government continues to monitor the crypto market to determine the “right” regulatory approach

According to the document signed by John Glen, Secretary of Commerce for the UK Treasury, this approach marks the “first phase of our advisory process” with the crypto industry. They also want to find out “where the most serious risk is” and highlight the importance of a risk-based regulatory approach.

Secretary Glen commented in the document:

The government will continue to actively monitor new and emerging risks as this market continues to mature. We will be ready to take further regulatory action to ensure that the market works for the people and companies that operate in it.

On January 11, 2021, the UK’s Financial Conduct Authority (FCA) warned investors about high-risk crypto investments and the rise in related fraud cases in the industry.

What do you think of the UK government document on the crypto industry? Let us know in the comments below.

Photo credit: Shutterstock, Pixabay, Wiki Commons

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