Officials in Britain will be revealing new plans for regulation of the crypto space, according to a report from CNBC.
Sources said that British finance minister Rishi Sunak will be releasing the new regulatory regime at an undetermined point in time over the “coming weeks.” The British treasury has made no official comments on the matter.
While the plans are still being fine-tuned, CNBC’s sources said that the new regime will likely be “favourable” to the industry by providing much-needed clarity to the space.
Officials within the British government have reportedly put in great effort to understand the complexities of the crypto markets, as well as stablecoins, the report says.
Britain’s treasury department has apparently been coordinating with multiple companies and firms within the industry during the move, including the US-based crypto exchange Gemini, which has its own USD-pegged stablecoin.
CNBC sources said that the treasury is viewing its latest move to provide legal clarity for cryptocurrencies as a response to president Joe Biden’s executive order which called for a government-wide strategy on researching and regulating the industry.
The expected move from British officials comes as the Financial Conduct Authority (FCA) has tightened compliance requirements for companies in the digital asset industry.
Starting March 31, firms operating crypto services in the UK must register with the FCA, or face closure. According to an FCA spokesperson, 80% of companies who had filed applications with the agency didn’t meet requirements.
“We’ve seen a high number of the crypto asset businesses applying for registration not meeting standards there to help ensure firms are not used to transfer and or disguise criminal funds…
Firms that do not meet the expected benchmark can withdraw their application. Firms that decide not to withdraw have the right to appeal our decision to refuse, including through the courts.”
According to a report from City A.M, only 33 firms had successfully made it through the FCA’s applications, with Gemini being the first. Blair Halliday, head of Gemini UK, said that most firms probably underestimated what it would take to get past the FCA.
“We understand what it takes to get the regulator comfortable with our activity and what we have to demonstrate,” he said.
“If you aren’t familiar with that process, it can be kind of it can be very daunting, it can take time… it’s very much a process of getting regulators comfortable and understanding of how your business operates,” he added. “I think there could have been some firms that thought this was going to be a very routine process.”