“Until there is more certainty in these frameworks, we are intending to utilize existing regulatory initiatives to develop policy and regulation for this asset class,” said HM Treasury.
In a consultation paper published earlier this month, HM Treasury outlined its plan to establish regulatory sandboxes under the Financial Services and Markets Act. These sandboxes would provide the government with the necessary time to make any required modifications to existing legislation for crypto products. The proposed framework aims to grant companies the opportunity to operate while the government determines how their products or services fit within the current regulatory framework.
Future Financial Services Regulatory Regime for Cryptoassets
KYAX recently submitted our response to HM Treasury’s consultation paper on the Future Financial Services Regulatory Regime for Cryptoassets. The proposals put forward in the consultation aim to establish comprehensive regulation for crypto in the U.K. We anticipate industry support for these proposals, as they are expected to support legal clarity and drive the industry toward institutional adoption.
First and foremost, the consultation paper rightfully recognizes the impact of crypto on the financial services industry. While advancements in financial instruments come with risks, it is crucial to effectively manage those risks without stifling innovation.
Secondly, HM Treasury’s approach to the crypto space involves regulating the activities rather than individual assets. This aligns with the regulatory principles followed in traditional finance, with the goal of achieving consistent regulatory outcomes for similar risks.
To read KYAX’s full response to the consultation, please see below:
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