Uncertainty looms over Britain’s crypto landscape as the UK government reveals its ambitious regulatory framework. The Financial Conduct Authority won’t even start authorizing crypto firms until 2026, leaving the industry in limbo for nearly two years. Meanwhile, authorities haven’t wasted time flexing their muscles against suspicious crypto activities. Millions in digital assets have been frozen. Just like that.
While regulators craft their two-year masterplan, crypto millions vanish into government freezers without ceremony.
The government’s grand plan includes everything from stablecoin regulations to market abuse prevention. Pretty thorough stuff. The FCA’s roadmap is painfully drawn out though. They’ll release a discussion paper on admissions and disclosures in late 2024, followed by consultations on stablecoins in early 2025. The final rules? Don’t hold your breath until 2026.
Stablecoins are getting special attention. They won’t fall under existing payment regulations but will get their own rulebook. The FCA plans to address backing assets, redemption, and custody requirements. Makes sense. These things actually pretend to have stable value, unlike their volatile crypto cousins. Unlike decentralized exchanges, these new regulations will primarily affect centralized platforms where authorities can more easily enforce compliance.
Market abuse prevention is front and center too. The UK wants to ban insider dealing and market manipulation for crypto. Revolutionary concept, right? Trading platforms will need systems to detect and prevent abuse. They’ll also have to share information across platforms. The new Market Abuse Regime provisions are expected to take effect from 2025. The legislation will include prohibitions on insider dealing and require disclosure of inside information to protect consumers. Criminals are shaking in their boots. Or not.
Cryptoasset Trading Platforms face the heaviest burden. They’ll need FCA authorization and must implement due diligence for issuers and transparency obligations. Sounds exhausting.
Anti-money laundering measures remain in place. Firms marketing crypto to UK consumers must register with the FCA. No exceptions.
Looking ahead, the Property (Digital Assets) Bill aims to clarify the legal status of crypto. The UK desperately wants to become a “global hub” for securities tokenization. Good luck with that. With regulations this strict and implementation this slow, crypto innovators might just look elsewhere. Sorry, Britain.
