POSSIBLE CRYPTO REGULATION THROUGH UK FINANCIAL SERVICES LAW

Cryptographic investments have diversified, capturing the attention of many people, where the possibility of acquiring crypto assets can be done quickly and easily through exchange platforms where funds are deposited in a digital wallet.

These transactions, which are often essential, differ according to how the operations are carried out and the participants in them, whether the funds are directed to a wallet, to a trader’s account, or simply to an investment platform for their subsequent negotiation. For more information, we suggest you check expert blogs about crypto trading and investments on this URL.

What is the Financial Services Bill?

The United Kingdom Financial Services and Markets Act is based on supporting users and consumers of goods and services in the European territory concerning access to Fiat currencies.

The bill establishes maintaining the facilities and the necessary infrastructure for the deposit and withdrawal of cash throughout the United Kingdom, achieving long-term sustainability.

Emphasis is placed on the correct use of cash, as well as establishing that this form of money is the most important and mostly used payment method by people in the region, which is why The Government undertakes to maintain its circulation and preserve it over time.

This legal instrument will also regulate the payments made. The banks will be forced to reimburse for losses from fraudulent payment systems, which could represent millions of dollars.

Many objectives are included in this legal framework; all focused on protecting citizens and users of cash in the European territory, reducing bureaucracy, maintaining high regulatory standards, and reforming the financial system.

Regulation of Stablecoin and Exchange Providers

Stablecoins represent a new perspective on the elements that make up the traditional financial system from the digital aspect, where a link with digital financial instruments characterizes physical assets.

However, these elements of the digital financial market are relatively new and are diversifying capital management options and therefore are beginning to be subject to various regulation methods.

Despite supporting the decentralized characteristics of digital currencies and stablecoins, Cryptocurrency followers are aware that the only way for them to be considered conventional financial instruments is through regulation.

The regulation could grant investors with great capacities, such as corporate or institutional investors, the ability to invest with greater security and legitimacy; only the rules must be adapted to the jurisdiction of each country.

Legal instruments control and regulate operations with cryptocurrencies, only that they are different in each country; in turn, due to the similarity of stablecoins with cryptocurrencies, the same regulation is applied to them, which is studying the possibility of creating a law unique to stablecoins.

The way to regulate stablecoins varies according to the jurisdiction in which they are exchanged; for example, in the United States, controlling this type of digital asset is precise, and they are even considering the creation of a digital dollar.

The European Union also has a regulation on cryptocurrencies mainly focused on stablecoins, where these must be registered with the regulatory entities for their subsequent legal commercialization.

History of regulation of crypto assets in the world

Interestingly, these digital financial instruments have transcended, and most of the laws and regulations created worldwide are usually quite similar concerning the treatment given to cryptocurrencies.

In most countries, the use of cryptocurrencies is monitored to prevent tax evasion, money laundering, and illicit business operations, where digital currencies seem to be the perfect instrument.

Crypto assets, whatever their classification, are similar in terms of their use; some tend to use them to make international transfers, others may have them as an investment, and another group of people may consider them an income-generating instrument.

For this reason, the regulation of cryptocurrencies is not such a crazy idea, only that the decentralization of these is limited since the financial institutions and the Government will be those that will have control of the operations, then continuing with the traditional scheme financial.

Conclusion

With the modifications that are expected to be implemented in the United Kingdom Financial Services Act, without a doubt, it is intended to innovate by including these digital financial instruments that have proven to work without the intervention of third parties but that, with timely regulation, could achieve massive adoption.