Crypto regulation plan by UK Government-FCA says many crypto businesses do not meet AML standards
Updated: Sep 26, 2022
In the coming weeks, UK officials are expected to announce plans to regulate the cryptocurrency market, with a focus on stable coins, a fast-growing type of token.
With several firms and trade groups in discussions with the British department, UK Finance Minister Rishi Sunak is expected to unveil a new regulatory regime for cryptocurrency.
The circulating supply of Tether, the world's largest stable coin, has increased from about $4 billion (€3.6 million) to $80 billion (€72 billion) in the last two years.
Regulatory agencies are concerned that the tokens are not fully backed by reserves and could be used to launder money or for other illegal purposes.
Regulators are also concerned about the financial system's possible exposure to bitcoins and other digital currencies, as well as their potential use to circumvent sanctions imposed on Russia as a result of its invasion of Ukraine.
According to CNBC, the Bank of England has called for more stringent regulations to reduce the risks that cryptocurrency poses to financial stability.
The Bank of England's Deputy Governor, Sam Woods, stated that banks and investment firms have shown "increased interest" in "entering various crypto markets."
If several companies do not make it onto the Financial Conduct Authority's (FCA) crypto-asset register by the March 31 deadline, their crypto operations in the UK will be shut down this week.
The FCA claims that a "high number" of crypto businesses fail to meet anti-money laundering requirements.
The FCA has placed 33 companies on its list, with more than 80% of the companies assessed having their applications rejected or withdrawn.
By fLEXI tEAM