Amid the summer months, when policymaking often slows, the UK has surged ahead in its quest to establish itself as a crypto hub. King Charles III's granting of the Royal Assent to the Financial Services and Markets Bill (FSMB) marked a pivotal moment, formally enshrining the bill as law. Within this comprehensive legislation, aimed at empowering financial regulators, lie provisions for the regulation of digital assets. These provisions empower the UK's treasury, the Financial Conduct Authority (FCA), and the central bank to oversee crypto as a regulated activity, paving the way for secondary legislation to govern the sector.
The FSMB encompasses measures to bring stablecoins under the purview of existing payment rules and to facilitate supervision of crypto promotions. This move arrives as the UK aspires to assert itself as a thriving crypto hub. Despite previous setbacks and challenges, including digital asset firms' struggles to register with the FCA and the halting of the Royal Mint's non-fungible token (NFT) plans, the FSMB represents a comprehensive effort to cultivate a measured approach to crypto regulation.
With crypto's incorporation into the FSMB, the UK demonstrates its commitment to advancing in the crypto landscape. The government's recognition of the potential of Web3 has prompted notable players like venture capital firm Andreessen Horowitz (a16z) to establish an international presence in the country. UK Prime Minister Rishi Sunak has expressed determination to transform the UK into a global Web3 hub, infusing new energy into the crypto industry.
The FSMB's positive momentum has invigorated the crypto sector, which has been grappling with challenges stemming from the FTX crypto exchange collapse and the resulting regulatory uncertainties, especially in the US. However, despite the favorable trajectory, stakeholders caution that the UK's regulatory journey is in its early stages, with considerable hurdles ahead.