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UK Policy & Regulatory Approach to Cryptoassets Published

29th October 2018

UK Policy & Regulatory Approach to Cryptoassets Published

As part of the Treasury led Cryptoasset Taskforce, the FCA has today published a report on the UK’s policy and regulatory approach to so called ‘cryptoassets’.

The report has been published, having considered the policy and regulatory implications of distributed ledger technology and cryptoassets. In addition it aims, at a high level, to set out some of the opportunities and risks they they present.

The regulator made it clear that in its view, cryptoassets have no intrinsic value and investors should therefore be prepared to lose all the value they have put in.

It seems that whilst the Taskforce recognises that cryptoassets have the potential to bring benefits to markets, firms and consumers, there still remains the considerable risks that the Treasury, the Bank of England and the FCA will take action to mitigate.

The key risks include:

So, in order for the Taskforce to mitigate these risks, they have committed to a number of actions, including consulting upon:

In addition, given the complexity and new challenges presented to traditional forms of financial regulation, it was deemed that more time is needed to consider how regulation can “meaningfully address the risks posed by exchange tokens, such as Bitcoin”.

Thus, the government is looking to issue a consultation early next year to further explore whether and how exchange tokens, and related firms such as exchanges and wallet providers, could be regulated effectively.

Market developments will continue to be monitored by the authorities and hey will continue their work with their international counterparts in order to consider appropriate domestic and more global responses.

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