The Financial Conduct Authority (FCA) of the United Kingdom is planning to hold series of sessions that will deliberate on Cryptocurrency regulation. To the excitement of the Cryptocurrency community, the FCA is recognizing the implications of Digital Tokens in the UK economy and these deliberative sessions will shed light on what activities need to be regulated to streamline Cryptocurrency markets.
The UK’s financial watchdog’s decision will ensure that in the long-run, Cryptocurrencies are treated as mainstream currencies or assets in recognition to their role in the financial space. This could see to it that BTC, ETH, XRP, etc. are subject to certain security policies under the new laws that will be formulated as a result of the sessions.
Cryptocurrency Adoption Is Growing
The total market capitalization of Cryptocurrencies is at a paltry $123 billion according to Coinmarket cap data. Given that the world has a combined nominal output of about $81 trillion, this figure is still small but the fact remains that it is set to grow exponentially over the next few years. The same data shows that BTC has a dominance of over 52% and the daily transaction volumes are ever dynamic but still on an upward trajectory.
Despite the ongoing bear cycle, many people are interested in Cryptocurrencies and the demand for Cryptos is surging by the day. The FCA believes that “an increasing number of consumers” in the UK Crypto market is a reason to enact policies to protect these investors despite the fact that this market is still nascent and small. Right now, the aim of the FCA is to reach a concrete conclusion of which Digital Token activities need to be authorized and controlled.
Investors Will Be Heard
The hearing sessions will be democratic in nature. Since the aim is to ensure that there is a clear categorization of Cryptocurrencies in classes of assets, the affected parties that include Blockchain firms and Cryptocurrency holders will have a chance to give their opinions on the course of action that optimizes their benefits. The feedback will also be collected from the wider public who have a great sense of responsibility in UK laws.
According to the FCA executive director of strategy and competition Christopher Woolard, the sessions would be easy to manage as the market is still small. Additionally, Woolard believes that the involvement of consumers in the process would ensure that the end policy benefits all stakeholders especially investors.
Potential reforms that may come out of the hearings include expansion of the regulatory framework to include diverse Cryptocurrency market activities such as STOs, ICOS, Crypto exchange transactions, etc. However, there could be a ban on the sale of derivatives that pertain to select Cryptocurrencies. This could be in a move to protect retail investors to risky transactions.
Meanwhile, the decision by the FCA to consider starting the process of creating Cryptocurrency policies could be in a bid to attract more businesses to the UK in the wake of the Brexit Chaos. Many citizens believe that the UK is headed for a hard crash out of the EU as Theresa May has failed to table a different proposal than what was initially rejected overwhelmingly by MPs.