How does UK crypto regulation look like?
Governments around the World are trying to minimize cryptocurrency abuse, use for money laundering and other illicit activities. Like many others, the United Kingdom’s legislative body wants to step in. UK authorities have been planning to regulate cryptocurrencies for a while, but their plans are starting to take the final shape. That shape may not look attractive to a lot of people.
Great Britain seems determined to go hard or go home. It would appear, UK might go beyond the Fifth EU Anti-Money Laundering Directive in its attempts to regulate crypto and blockchain related activities. They plan to create a “robust regulatory response”. The new system will aim to do more than what the European Union’s Anti-Money Laundering Directive requires from the country. The country’s regulators describe the document as “one of the most comprehensive responses globally to the use of crypto assets for illicit activities”.
The government of the country stands ready to give its regulator the necessary tools to control cryptocurrency asset management. Some members of the leadership view crypto as “Wild West”, that brings an unjustified number of risks to consumers and entire countries.
The legislative body of the country is already involved with certain cryptocurrency related assets, but it seems eager to expand its role in the emerging market’s dealings. The FCA justifies this with intent to protect people and the country from fraud and money laundering.
Professionals doubt that the government will meet the deadlines it sets
The process isn’t as easy as it appears. Experts think the full process could take up to several years. They say that implementing crypto market regulations in a time-consuming task that could see the government of the country struggle to accomplish. Researchers and professionals back this opinion with past precedent, saying that even simple changes to the law usually take up a significant amount of time.
Potential benefits of regulation
Experts mostly agree that attempts to create a workable and regulated system for cryptocurrencies are a battle that needs to be won if crypto is to have a future. As cryptocurrency becomes more and more widely adopted around the World, protecting the newly emerging phenomenon becomes more and more important. They seem to think that these processes can have positive effects on a wide number of fronts. Experts hope that the UK aims to protect providers serving the crypto markets, investment banks and average citizens from funds abuse and fraud committed by third parties. Tax agencies are also determined on grabbing their piece of the pie along with doing some good for the people.
The government thinks it should mediate with companies
The United Kingdom’s legislators express opinions that the financial regulator could supervise companies in areas where money laundering, fraud and terrorism threats were concerned. They remain positive about the potential benefits of initial coin offerings (ICO’s) and say the mechanism could be used as an effective tool to raise capital.
The country intends to employ formal mechanisms in order to protect customers from fraud and compensate them in cases deemed appropriate. The UK also hopes to become a global centre for cryptocurrency if it creates such defensive systems.
The regulating efforts could also see the UK ban selling cryptocurrency-based derivatives. With the changes it wants to introduce, the country hopes to spur innovation, encourage competition and also help crypto realize itself as a major actor in the modern World. Cryptocurrency derivative ban will entail restricting sales of CFDs, futures, options and securities to the public.
What can we expect?
The country plans to publish consultations on the issue during the first quarter of 2019. With that in mind, UK’s crypto community is looking at a reality that’s about to undergo rapid transformation.
Bitcoin’s price along with pretty much everything else could suffer short-term. Smaller scenes like crypto gambling might also be in financial jeopardy until the dust settles. Cryptocurrency based gambling practices are an increasingly popular way to play. Some people use crypto to avoid directly funnelling funds into online casinos. This way their credit score isn’t affected. Some countries are known to take people’s gambling habits into account when deciding on loans for them. This scene’s popularity could also suffer short-term.
It’s unknown how the changes that the UK plans to roll out will affect the market. The new regulations are likely to significantly impact the popularity of ICOs in the short term.