The UK has officially recognised cryptocurrencies as a regulated financial sector under the Financial Services and Markets Act 2023. Proposed as a bill, this development made the Financial Services and Markets Act 2023 a legitimate law in the UK on Friday, June 30. The bill has been stamped with King Charles’ approval and the royal assent which now brings crypto assets on the forefront of being used as tools to revamp the UK’s existing financial system.
The UK has been pacing to compete with the likes of other pro-crypto nations like Hong Kong, Nigeria, and the UAE, which are looking to establish themselves as crypto hubs.
“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 (roughly Rs. 10,36,8 crore) for productive investment and help cultivate innovation and grow the economy,” the official press statement from the UK government said.
Despite its volatile nature, cryptocurrencies have managed to onboard millions of community members from around the world. The sector has also generated multiple jobs.
Crypto-related employment in 2022 hit the mark of 82,200, representing a spike of about 351 percent from 2019’s figure of 18,200, data by Block Research had claimed last year.
With regulating the crypto sector, the UK is essentially gearing up to bank on all the growth and employment opportunities that the industry unlocks in fintech.
“Today’s ground-breaking Act enhances the scrutiny of the financial services regulators to ensure clear accountability, removes unnecessary restrictions on wholesale markets, protects free access to cash in law, and establish ‘sandboxes’ that can facilitate the use of new technologies such as blockchain in financial markets,” the release added.
Protection plan for victims of Authorised Push Payment scams will also be put in place under this law to safeguard investors against financial risks.
“This forward-looking legislation, following the Markets in Crypto Assets (MiCA), 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 UK,” Edul Patel, the CEO and Co-Founder of Mudrex told Gadgets 360.
While this does mark a landmark development for crypto adoption in the UK, this is not the first time that the country has expressed its support to the nascent financial institution.
The British government legalised stablecoins last year, looking for avenues to empower local financial regulators with more authority over the crypto sector.
