- UK parliament has voted on a new stablecoin bill that can potentially shape the future of cryptocurrencies.
- The bill aims to establish the UK as a potential global hub for crypto.
- Industry experts have anticipated significant benefits for crypto investors.
In the United Kingdom, stablecoin regulation is on the verge of becoming a reality through the Financial Services and Markets Bill (FSMB). The House of Lords recently approved this bill, acknowledging cryptocurrencies as a regulated activity and recognizing stablecoins as a means of payment.
FSMB’s House of Lords Passage Boosts UK’s Crypto Oversight
This move signifies a significant step toward implementing comprehensive regulations in the UK. The FSMB’s passage through the House of Lords demonstrates the UK’s commitment to leading in stablecoin and cryptocurrency regulation.
Currently, the bill is on the cusp of entering its final stages before officially coming into effect. With over 340 pages, this extensive legislation, introduced in July last year, aims to grant regulators greater power in overseeing the country’s financial system.
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The FSMB has undergone several amendments, including introducing oversight for cryptocurrency promotions. For instance, in March 2022, the Advertising Standards Authority issued an Enforcement Notice to more than 50 companies advertising crypto. This notice served as a comprehensive guide for advertisers in the crypto industry.
Before the FSMB becomes law, it will undergo further discussions in the lower house of parliament. Once both chambers agree and approve the document, it will be presented to the King for final approval. This bill may go back and forth between the chambers until a mutually agreeable outcome is reached.
UK’s Crypto Bill Excites Experts, Offers Growth & Innovation
Anto Paroian, CEO at ARK36, welcomed the news, stating, “If the bill is accepted and put into law, this could propel the cryptocurrency industry as a whole into a more mature and respected position within the global financial landscape while putting Britain on the map as a potential global hub for crypto.”
Paroian highlighted the potential benefits for crypto investors, such as improved market integrity, increased institutional participation, and broader acceptance of cryptocurrencies as a legitimate form of financial innovation.
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Michael Silberberg, Head of Investor Relations at AltTab Capital, emphasized the opportunity for the UK to establish its own regulatory framework independent of the European Union’s regulations.
Silberberg said, "By striking the right balance, the UK can avoid burdening the industry with excessive red tape and regulatory hurdles, creating an environment conducive to innovation and growth."Â
He further suggested that the UK could take inspiration from Switzerland, which has successfully implemented crypto regulation to support both the industry and consumers.
Bradley Duke, co-CEO at ETC Group, emphasized the significance of the bill entering statute law, stating, “The advent of the bill will be an important leap for the UK in establishing itself as a global digital asset hub and keeping pace with the European Union.”
The EU has already signed its Markets in Crypto Assets (MiCA) bill into law, and the UK’s regulatory advancements aim to align with the EU’s approach.
On the Flipside
- Increased regulation could create barriers to entry for new players in the stablecoin market, limiting competition and potentially favoring established players.
- It remains to be seen whether the FSMB‘s provisions for oversight and regulation will be effectively implemented and enforced by relevant authorities, as this will greatly influence its ability to combat illicit activities and money laundering.
- Ongoing developments in technology and the crypto landscape may require continuous updates and adaptations to the FSMB to keep up with emerging risks and associated challenges.
Why This Matters
The approval of the Financial Services and Markets Bill (FSMB) by the House of Lords brings the UK one step closer to implementing stablecoin regulation. This development signals the growing global trend of governments recognizing the need for comprehensive regulations in the crypto sector.
To learn more about the recent developments in stablecoin market caps, read here:
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