The UK’s leading financial regulator has proposed new guidelines on the application of existing financial regulations to cryptocurrency, marking a significant step towards establishing a regulatory framework for this sector.
The Financial Conduct Authority (FCA) released a consultation paper on Wednesday that outlines minimum standards for crypto firms once the industry falls under its jurisdiction. The regulator emphasized that these rules aim to strike a balance between fostering innovation and ensuring consumer protection and market integrity.
“Our goal is to cultivate a sustainable and competitive cryptocurrency sector that encompasses innovation, market integrity, and consumer trust,” remarked David Geale, executive director of payments and digital finance.
While acknowledging that these proposals won’t eliminate investment risks associated with crypto, Geale noted that they will help businesses establish common standards, thereby giving consumers clearer expectations.
FCA seeks input for tailored cryptocurrency regulations
The FCA indicated that many requirements mirror those imposed on traditional financial entities, including operational resilience rules and anti-financial crime measures. The regulator also opened discussions on topics unique to cryptocurrency markets.
Comments are being solicited from stakeholders regarding whether the UK’s Consumer Duty, which obligates financial entities to ensure favorable outcomes for consumers, should extend to crypto firms and their activities. Feedback is expected in October and November, with definitive rules for crypto companies anticipated by 2026.
Additionally, the regulator is seeking opinions on how to handle crypto-related complaints, specifically whether consumers should be able to refer these grievances to the Financial Ombudsman Service, the UK’s designated body for resolving disputes between financial institutions and consumers.
This proposal follows His Majesty’s Treasury — the UK’s economic ministry — releasing its draft legislation in April.
The preliminary rules for cryptocurrency aim to align exchanges, dealers, and agents with existing regulations.
The government asserts that this approach indicates that the UK is “open for business” while remaining vigilant against fraud and abuse.
Related: UK petition for blockchain innovation gains traction after Coinbase push
UK to enhance collaboration with the US on cryptocurrency
The consultation comes as both the UK and US seek to strengthen their collaboration on digital assets.
According to a report by the Financial Times on Wednesday, UK Chancellor Rachel Reeves and US Treasury Secretary Scott Bessent discussed ways to improve coordination on cryptocurrency.
Anonymous sources cited by the outlet indicated that conversations included companies such as Coinbase, Circle, and Ripple, as well as executives from established financial institutions like Bank of America, Barclays, and Citi.
Cointelegraph contacted the FCA for additional details but did not receive a response by the time of publication.
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