The call for regulatory overview on cryptocurrencies is long due. And not only cryptocurrencies, but the so called “digital assets”. Countries around the world classify digital coins in many different ways.
Now, the UK FCA has clarified its position on how to regulate digital assets. The FCA has also given its stance on which tokens it will be responsible for.
The FCA has taken serious steps in determining its regulatory position on cryptocurrencies. Back in January, the FCA posted a consultation paper which included more than 80 responses from important third-party stakeholders such as crypto exchanges, banks and trade associations on what will be the next step in determining fair market conditions with regulatory oversight.
This is what the report stated:
Following our consultation, we are proceeding with the guidance that was consulted on, with some drafting changes to improve clarity based on responses. This includes reframing our taxonomy of crypto assets to help market participants better understand whether tokens are regulated, and where they fall outside our remit.
For now, the FCA considers cryptocurrencies such as Ethereum and Bitcoin to be so called “exchange tokens”. These will not be regulated per se, but will fall under strict anti-money laundering rules.
Security tokens will be under the regulation of the FCA. The regulatory body has reclassified some of the tokens and now a few important definitions and categories have been amended. For example, tokens classified as “utility” tokens will not be regulated by the FCA except if they are not also categorized as e-money tokens – in which case they will be under the control of the FCA.
Regarding stablecoins, some of those can be classified as e-money as well. While there are many definitions and clarifications to be made, the UK FCA has already taking great steps in securing the future of digital assets in the UK.