UK Releases New Draft to Include Staking, Stablecoins, and Other Crypto Custody Services Under FCA Regulation
On April 29, the UK Treasury published a new legislative draft proposing regulatory measures for crypto services, including stablecoins, staking, and custody. The new rules are part of the government's broader 'transformation plan' aimed at bringing cryptocurrency exchanges and related companies into the Financial Conduct Authority (FCA) regulatory framework, similar to the standards for traditional financial services.
UK Chancellor Rachel Reeves stated that the goal of these reforms is to make the UK 'the best place in the world for innovation,' enhancing investor confidence, promoting industry growth, and protecting domestic investors' interests.
The new regulations require companies engaged in cryptocurrency activities to obtain authorization to operate in the UK, which means that issuing stablecoins or providing custody services must comply with the new rules. In addition, the draft clarifies the definitions of 'crypto assets' and 'stablecoins' for compliance, helping crypto custody companies distinguish between asset types and ensuring they are regulated under existing financial services legislation.
It is worth noting that current stablecoin payments are not regulated under the Payment Services Regulations, and as their adoption increases, relevant rules will remain open and flexible in the future. Furthermore, the regulations state that regardless of a company's registration location, as long as you have ties to the UK market, you are required to comply with these rules.
In terms of financial advertising and anti-money laundering, authorized crypto companies can independently approve promotional activities, ending the previous temporary regulations for unauthorized companies, thus aligning crypto advertising regulation with traditional financial service standards. Additionally, the updated anti-money laundering regulations mean that previously authorized companies do not need to register a separate entity.
Regarding implementation timing, the FCA will establish an application window before the new regulations come into full effect, allowing existing crypto asset companies to apply for authorization. Those companies that fail to obtain authorization during the transition period will enter a two-year winding down process, during which they can maintain contracts but must cease all new business with UK consumers.
Additionally, the first 'Financial Services Growth and Competitiveness Strategy' will be released on July 15, and the introduction of these new regulations will undoubtedly have a significant impact on the UK crypto market!
