In a significant move for the global crypto market, the United Kingdom has officially passed a landmark bill recognizing cryptocurrencies as regulated financial activities within the country. The decision reflects the growing acceptance and understanding of the potential of cryptocurrencies and marks a great turning point in the industry.
The UK government announced on June 29 that it had passed the bill recognizing cryptocurrency as a regulated financial activity. With royal assent from King Charles, the Financial Services and Markets Act 2023 has now become law.
The Financial Services and Markets Act 2023, which was introduced in July 2022, grants regulators the power to govern cryptocurrencies and stablecoins. It changes the way regulators have authority over the financial industry and empowers them to regulate the digital asset sector.
Andrew Griffith, Economic Secretary of the Treasury, emphasized the bill’s significance, stating, “The Financial Services and Markets Act 2023 is central to delivering the Government’s vision to grow the economy and create an open, sustainable, and technologically advanced financial services sector. It contains new powers – available due to Brexit – that will set the path for reforms to Solvency II, which will unlock around £100 billion for productive investment and help cultivate innovation and grow the economy.”
The bill grants the UK Treasury, Financial Conduct Authority, Bank of England, and Payments System Regulation Authority the ability to establish and enforce regulatory regulations in the cryptocurrency sector. By officially recognizing cryptocurrencies as regulated financial activities, the government has opened the doors for greater mainstream adoption.
The UK has been striving to compete with other pro-crypto nations such as Hong Kong, Nigeria, and the UAE, which are positioning themselves as crypto hubs. The government sees this legislation as central to its vision of enhancing the UK’s economy and creating a technologically advanced financial services sector.
The Financial Services and Markets Act 2023 also paves the way for the advancement of blockchain technology. It establishes “sandboxes” that facilitate new technologies like blockchain in financial markets, creating a more secure and transparent environment.
Edul Patel, CEO and Co-Founder of Mudrex, praised the legislation, stating, “This forward-looking legislation… aims to provide a robust regulatory framework that enhances investor confidence and fosters innovation in the crypto sector. By establishing clear rules and guidelines, it promotes a more secure and transparent environment for crypto-related activities, attracting greater participation from investors and businesses in the UK.”
The UK’s recognition of cryptocurrencies as regulated financial activities is a significant development for crypto adoption. It demonstrates the growing legitimacy of digital assets and showcases the country’s decisive regulatory approach.