The Financial Services and Markets Act, which affects the regulation of the cryptocurrency sector in the UK, has been finally approved.
The approval was preceded by the adoption of a comprehensive document that updated the supervision of the financial industry after Brexit.
The Financial Services and Markets Act allows regulators to develop a framework for the digital asset sector. It aligns with Prime Minister Rishi Sunak’s ambition to turn the UK into a global crypto hub.
The document allows the creation of regulatory sandboxes that allow experimentation with blockchain use cases in financial markets. It also secures the status of a means of payment for stablecoins.
After parliamentary consideration, the bill was amended to consider all cryptocurrencies as a regulated activity and give authorities the power to oversee their advertising.
“The passage gives us control over the financial services rulebook – the law supports businesses and consumers, and also stimulates economic growth. Repeal of old EU regulations will attract billions of investments,” said Treasury Secretary Andrew Griffith.
Earlier, Bank of England Deputy Governor John Cunliffe proposed regulating digital assets in a similar way to traditional finance. He pointed out that decentralized protocols at this stage do not provide an effective way to manage risk.
In December 2022, Cunliffe called for the creation of a regulatory framework for cryptocurrencies before “systemic problems” arise.