UK embraces stablecoin regulation, financial watchdogs wait and watch

UK’s crypto industry gave regulators new powers over stablecoins, payments-focused crypto assets. It remains unclear how financial watchdogs will interpret rules; regulation remains key to the UK’s post-Brexit economic strategy. 

Crypto.com granted license by UK’s Financial Conduct Authority

Crypto.com, a Singapore-based cryptocurrency exchange registered with Britain’s Financial Conduct Authority. The regulator granted permission to the exchange to provide services and goods relating to digital assets to consumers in the United Kingdom in accordance with laws against money laundering and "terrorist" financing.

This is considered a positive step in the direction of crypto regulation in the UK. The UK is one of the leading economies that proposed legislation targeting stablecoins after Terra’s UST lost its peg and collapsed, triggering a bloodbath in the crypto ecosystem. The decline of a $40 billion enterprise was alarming for regulators worldwide. Cryptocurrency businesses have welcomed the new rules and await guidance from regulators and financial watchdogs.

James Alleyne, legal counsel at the London-based law firm Kingsley Napley, said,

We will have to wait to see what new rules are introduced as a consequence of the bill to fully understand the new powers and approaches of the various regulators.

The proposed stablecoin rules map the UK’s post-Brexit economic strategy, the key to crypto market participants, institutions and platforms. The plan to extend financial regulations to cover payments-focused cryptocurrencies is intended to maintain a peg with fiat currencies, like the USD. The new rules would cover USDT, USDC, TUSD and other stablecoins that maintain a peg with fiat. 

Lisa Cameron, member of Parliament and chairwoman of the cross-party group for crypto, was quoted as, 

I see this as a key piece of legislation for financial services, which I hope can allow us to make the most of the opportunities of Brexit and to establish an approach to crypto regulation that is right for the U.K.