New Report Says Crypto Clarity for Legal Regulations in UK Might Take Over 2 Years
Clarity In Crypto Regulations In UK Can Take More Than Two Years
According to an RPC press release published Oct. 11 and written by Jeff Kaufmann, Legal Director at the British law firm, the introduction of cryptocurrency market regulations in the U.K. could take two years.
Reynolds Porter Chamberlain (RPC) is a London-based corporate and insurance law firm with offices in Bristol, Singapore, and Hong Kong, and staff amounting to 720 people, including over 80 partners and 330 other lawyers. Since 2014 the firm has been named Law Firm of the Year three times.
Past precedents show it can take years to make relatively minor regulatory changes to the financial regulatory regime. For example, it took two and a half years from the Treasury's original announcement (10 May 2004) for the regulation of home reversion plans to come in force (6 November 2006).
To regulate cryptocurrencies, HM Treasury will need to:
- Assess which specific activities related to cryptocurrencies need regulating perhaps with a market study
- Draft proposed regulations open to consultation
- After the consultation period has closed, publish changes and set an implementation date
James Kaufmann says:
“Even if MP’s latest proposals were fast-tracked, it could still take years for regulations to cover the UK cryptocurrency market that treads the middle ground between protecting retail participants and allowing the UK’s cryptocurrency market to thrive.”
According to Kaufmann, the introduction of new regulations would lead to increased involvement of the country’s financial watchdog, the Financial Conduct Authority (FCA), raising concerns as to whether the FCA has the necessary expertise and funding to regulate the crypto industry.
“The race to establish a workable and regulated regime for cryptocurrencies is surely worth winning as their usage becomes more widespread across Europe and globally. The creation of a cryptocurrency trading hub may also have positive knock-on effects for businesses serving these markets, such as brokers, investment banks, and custodians as well as a potential increase in tax revenues for authorities.”
Notably, in September, the Treasury Committee of the House of Commons called for a resolution to certain issues surrounding digital currency such as listing price volatility, poor consumer protection, the risk of hacker attacks, and money laundering. Additionally, they requested the FCA to oversee cryptocurrencies.