UK Lawmakers Vote to Regulate Crypto Financial Instruments

The lower house of Parliament voted in support of including cryptocurrencies in the scope of activities to be regulated under the proposed Financial Services and Markets Bill, which already intends to extend payment regulations to stablecoins.

Tuesday, British legislators voted in favour of recognising crypto assets as regulated financial instruments and products.

The House of Commons, the lower house of Parliament, gathered on Tuesday for a line-by-line reading of the proposed Financial Services and Markets Bill, which basically covers the U.K.'s economic plan post-Brexit. The legislators discussed a range of proposed amendments to the bill, including Andrew Griffith's proposal to include crypto assets in the purview of regulated financial services in the country.

The legislative draught already contained provisions to extend existing laws to stablecoins, which are cryptocurrencies tethered to the value of other assets such as the U.S. dollar or gold.

"The substance here is to treat them [crypto] like other forms of financial assets and not to favour them, but also to bring them under the scope of regulation for the first time," Griffith, the financial services and city minister, said during the parliamentary meeting before lawmakers voted overwhelmingly in favour of retaining the amendment.

The local crypto industry, which recently applauded the appointment of Rishi Sunak as the country's new prime minister, is likely to applaud moves to give legal status to digital assets more broadly. During Sunak's tenure as finance minister in the Boris Johnson cabinet, the markets law and, by extension, stablecoin regulations were enacted.

The crypto provision, which depends on the term of "crypto asset" added by new clause 14, "clarifies that crypto assets could be brought within the scope of the existing provisions" of the Financial Services and Markets Act 2000 concerning regulated financial activities, said Griffith. The rules could control crypto marketing and criminalise unlicensed enterprises operating in the country.

"The Treasury will consult on its approach with industry and stakeholders ahead of using the powers to ensure the framework reflects the unique benefits and risks posed by crypto activities," Griffith said.

According to Griffith, the inclusion of crypto in the bill's scope will ensure that the country's Treasury is prepared to respond quickly to developments in the crypto sector and deliver regulation in a "agile" manner that is consistent with the country's broader approach to regulating the financial services sector.

"The Treasury will consult on its approach with industry and stakeholders ahead of using the powers to ensure the framework reflects the unique benefits and risks posed by crypto activities," Griffith said.

However, the guidelines have a long way to go before they become law. The law must next pass through the Chamber of Lords, the upper house of Parliament, before the final consideration of modifications and royal assent by King Charles III.

By fLEXI tEAM