European Union · United Kingdom · Coinbase · CoinDesk
UK's bold new crypto rules promise to unlock global trading, but huge compliance hurdles still threaten the rollout
Compiled by KHAO Editorial — aggregated from 1 source. See llms.txt for citation guidance.
★ Tier-1 Source
The U.K.'s Financial Conduct Authority (FCA) unveiled its cryptocurrency regulatory framework this week, winning early praise for taking an internationally connected approach, but industry participants said significant questions remain before Britain can establish itself as a global crypto hub.
Key facts
- Particularly, FCA's new Qualifying Cryptoasset Trading Platform (QCATP) model should allow overseas exchanges to serve U.K. customers through locally authorized branches connected to existing global
- The existing AML registration process with the FCA, which is much narrower, is already incredibly demanding, with the FCA rejecting or forcing the withdrawal of over 85% of applications," he said
- Thomas Cattee, a partner at Gherson Solicitors, warned there is "a high risk of failure" for firms seeking authorization under the new Financial Services and Markets Act regime
- Also, FCA's new measures around global liquidity and non-domestic stablecoins contrast with what many industry participants view as the more protectionist approach set out by the European Union's
Summary
Industry participants say the FCA's approach to preserving global liquidity and overseas-issued stablecoins shows promise. Uncertainty over international crypto firms and DeFi, coupled with a demanding authorization process, however, could prove a deterrent. Institutional adoption could however be given the required boost through the legal certainty that the framework provides. The FCA's package of rules creates a framework that preserves access to global liquidity through overseas trading venues and allows non-U.K.-issued stablecoins to circulate, various industry participants have highlighted.