- The UK’s regulatory body is taking a collaborative approach to crypto.
- The FCA has called for crypto companies to work with it for the betterment of the space.
- The UK’s friendly approach to crypto regulation could be disastrous for U.S. crypto innovation.
The United Kingdom desires to be a crypto hub through friendly yet firm regulations. As work continues to build a legislative framework, the U.K.’s Financial Conduct Authority wants to engage with crypto businesses.
Executive Director of the FCA, Sarah Pritchard, delivered a speech at the City Week conference in London on Tuesday, April 26, which suggested the financial authority is open to collaboration on crypto regulation rather than pure enforcement.
“Let’s Work Together”
The FCA is one of the central regulatory bodies impacting the crypto space in the UK. It has often been critical and highly suspicious of the space, citing illicit use cases of crypto as problematic. However, Pritchard’s speech may indicate a changing approach.
"Let’s work together to shape our rules and regulations to benefit markets, consumers, and firms as crypto goes from niche to mainstream," Pritchard said. "Let us do it with our minds open to the potential gains and our eyes open to the risks."
The FCA’s friendly and collaborative approach to regulation bodes well for the UK and crypto firms that are facing harsh prosecution elsewhere. Ripple, currently enveloped in a major lawsuit with the SEC, is one such company that is viewed with a different lens in the UK.
In 2019, Ripple and its XRP token were deemed to have ‘non-security attributes’ by FCA; this led to Ripple stating the FCA was a “role model for digital asset regulation.”
Regulatory Push and Pull
In the U.S., where Ripple is currently based, there is an ongoing battle between crypto firms, the SEC, and other regulatory bodies. The U.S. approach has become “regulation by enforcement,” which is driving companies away, according to Ripple CEO Brad Garlinghouse.
It is not just Ripple facing an uphill battle in the U.S. Other crypto businesses are starting to look for new global jurisdictions. Gemini has revealed plans to launch its fourth international office in Gurgaon, India, while Coinbase has acquired a license to operate in Bermuda.
As more international jurisdictions provide clear crypto frameworks and express desires to cooperate and foster innovation – like the FCA – so it would be likely that major U.S. companies explore new locations.
On the Flipside
- Despite Ripple, Coinbase, Gemini, and many others bemoaning the ambiguous and murky U.S. crypto regulations, the SEC and its chair, Gary Gensler, insist the rules and laws are clear.
Why You Should Care
The U.S. regulatory approach is currently pushing companies away. However, if there are welcoming pull factors from the UK and its FCA, for example, there could be a crypto exodus on the cards.
Read more about Gary Gensler’s approach to crypto:
SEC Chair Gensler Insists Crypto “Regulations Already Exist” Ahead of Hearing
Read more about Charles Hoskinson’s view of his competition:
Charles Hoskinson Calls Competition ‘Ignorant’ on Cardano Security