The United Kingdom could receive robust regulations for digital currencies within a 12-month timeframe as part of its bid to rein in unregulated activities in the space.
Economic Secretary to the U.K. Treasury Andrew Griffith confirmed in a CNBC interview that the country is inching its way toward comprehensive regulations after nearly a decade of sitting on its hands. In the interview, Griffith said the incoming regime of laws is not designed to stifle innovation but will allow service providers “make the most of the opportunities from digital assets.”
“I think over the next 12 or so months is the window. We’ve got this great asset in the U.K., we’ve got control back of a rule book—not something the U.K. has had for decades—so we’ve got the ability to move in an agile and proportionate way,” Griffith said.
Griffith added that the bulk of the new regulations would draw inspiration from existing financial and banking laws to ensure a streamlined approach. However, emerging areas like blockchain technology could receive fresh legislative input to bring them in line with present-day realities.
Ahead of the incoming rules, digital asset service firms are preparing for the launch of a stablecoin regulation which Griffith says will set the tone for other regulations to follow. When quizzed on the potential of a central bank digital currency (CBDC), Griffith disclosed that the launch date will be further than 12 months as regulators are still debating over privacy and technological issues.
“If you’re going to have a sovereign digital currency you’ve got to have the highest level of resilience and infrastructure, so that’s not going to happen overnight,” Griffith said.
In the absence of proper legislative rules, regulatory agencies like the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA) have been taking the lead in policing the industry. The ASA upped the ante in flagging down advertisements that failed to portray the risks associated with investing in digital currencies, while the FCA has been on a spree of enforcement action against bad actors.
Coinbase offers a helping hand
Early in the week, Coinbase CEO Brian Armstrong met with Griffith to suggest the best ways for the country to issue “sensible crypto regulation” ahead of the U.K. Fintech Week. It’s worth noting that Coinbase is facing regulatory action across the pond; most recently, it received a Wells notice from the U.S. Securities and Exchange Commission (SEC) warning it to expect imminent legal action for violations of federal securities laws.
Armstrong’s Coinbase (NASDAQ: COIN) has nine recommendations for U.K. regulators to consider, including the speedy development of a regulatory framework and a government stance that is receptive to stablecoins. Amstrong remarked that the country should clarify tax requirements relating to digital currencies and backtrack on the 24-hour “cooling off” period on digital currency transactions.
“Put Web 3 and blockchain at the heart of government with a cross-departmental strategy that capitalizes on the next wave of tech innovation and digitization of the economy,” Armstrong said. “Doing so will create a bigger, fairer and more digital economy, and boost UK competitiveness.”
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