UK updates cryptocurrency regulations

The head of the British Treasury, Rachel Reeves, presented a new strategy for regulating digital assets, according to which crypto platforms, traders and intermediaries will have to comply with the same requirements as traditional financial institutions, Bloomberg writes.

In addition to the current Financial Services and Markets Act 2000 (FSMA), three new areas of regulation will be introduced: crypto asset trading, custody, and staking. The main innovation is the change in the status of stablecoins, which are now classified as securities rather than electronic money. This means that UK issuers of fiat stablecoins will be required to comply with the disclosure standards set out in the white paper. Foreign stablecoins will only be able to be sold in the country through platforms approved by the regulator.

According to Bitget COO Vugar Usi Zade, the new rules could strengthen trust in the crypto industry.

"Previously, many platforms avoided the UK market due to regulatory uncertainty. Now companies have a clear algorithm for obtaining licenses," he said.

However, he warned that the exclusion of stablecoins from the Electronic Money Regulations (EMR) 2011 could reduce their availability as settlement instruments.

Earlier, the UK Financial Conduct Authority (FCA) announced plans to ban individuals from purchasing crypto assets using borrowed funds, including credit cards.