The United Kingdom (UK) Treasury has remained at the helm of affairs in terms of crypto regulations and has now made public a consultation paper that outlines the plan it has for regulating crypto trading platforms and exchanges.
Markedly, the Treasury is making this move to show its openness to the technological advancement ongoing in the blockchain industry and at the same time, ensure customer protection.
Specifically, the consultation paper includes guidelines for regulating digital asset service providers, lending transactions, and how digital assets are stored. Additionally, the document described crypto assets as having “a range of potential benefits, as well as posing risks to the consumer.”
According to a statement by the Treasury, the consultation paper is open to the public until April 30th.
The reason for this is to give “confidence and clarity to consumers and businesses alike.” The UK Treasury plans to bring the crypto industry up to standard with traditional financial systems where the risk of volatility is at its lowest due to regulations set in place. The risk of volatility and structural vulnerabilities are a few of the problems encountered by businesses in the crypto industry.
Treasury Targets Economic Growth With Crypto Regulation
While the British parastatal hopes that such loopholes and their effects will be significantly mitigated with a robust regulatory framework, it is also optimistic that it will enable “a new and exciting sector to safely flourish and grow, boosting jobs and investment”. This has been a crucial line of thought of regulators in several regions since the implosion of the Bahamian-headquartered cryptocurrency exchange FTX.
“We remain steadfast in our commitment to grow the economy and enable technological change and innovation — and this includes crypto-asset technology,” the Economic Secretary to the Treasury and financial services minister Andrew Griffith explains. “But we must also protect consumers who are embracing this new technology — ensuring robust, transparent, and fair standards.”
UK parliament members were already in full support of a standard regulatory framework for crypto in the form of a Financial Services and Markets Bill even before FTX crashed and its founder Sam Bankman-Fried resigned as Chief Executive Officer (CEO). One of the features of this Financial Services and Markets bill is to categorize crypto as a regulated financial instrument.