In a significant development for the cryptocurrency industry, the United Kingdom’s House of Lords has passed the Financial Services and Markets Bill, signaling the country’s commitment to regulating crypto-assets and their providers. This legislation, introduced in July 2022, has the potential to impact the cryptocurrency markets considerably. With the endorsement from the House of Lords, it is now one step closer to becoming law.
Initially designed to harness post-Brexit opportunities and empower financial regulators, the bill underwent amendments as it progressed through Parliament. Focused initially on regulating stablecoins under national payment rules, it has evolved to encompass all cryptocurrencies as regulated activities, accompanied by measures for overseeing crypto promotions.
This bill, part of the government’s “Future Regulatory Framework” review, represents a comprehensive agenda for significant transformations in the financial services sector. It aims to repeal and replace laws and regulatory requirements that originated from EU measures following Brexit.
The legislation’s provision for regulating crypto-assets and their providers excites the cryptocurrency sector. This groundbreaking move in UK law seeks to introduce regulatory supervision into an industry known for its laissez-faire approach. The goal is to bring greater transparency and stability to volatile cryptocurrency markets.
Additionally, the bill addresses the regulation of ‘Buy Now Pay Later’ products and their providers, focusing on enhancing consumer protection. It also ensures the preservation of access to cash, recognizing its importance for demographics that still rely on physical currency.
Furthermore, the bill introduces the possibility of mandatory reimbursement for victims of Authorised Push Payment (APP) scams, a prevalent issue in the UK. Targeting tighter controls on those who approve financial promotions for others, it aims to foster greater accountability in the financial ecosystem.
Several consultations on its provisions are underway as the bill progresses through the parliamentary process. Certain aspects are expected to spark intense debate, while other provisions may be swiftly integrated into the regulatory system.
The UK’s commitment to crypto regulation reflects a broader global trend toward establishing oversight in the cryptocurrency space. With greater regulatory clarity and safeguards in place, stakeholders anticipate a more mature and secure environment for the future of digital assets.