Following a consultation on crypto-asset regulation guidelines that began in January, the UK Financial Conduct Authority (FCA) released its final report on cryptocurrency rules on July 30th.
Cryptocurrency regulation guide
The published report summarizes the reviews of the Consultation Document issued in January, the answers of the FCA, as well as the Final Recommendations of the regulatory body that will allow market participants to understand whether certain crypto-assets are within the regulatory perimeter or are otherwise regulated.
The FCA received 92 responses to its consultation document “from the financial services sector and beyond,” including banks, trade associations, consulting companies, fintech issuers, tokens and crypto-asset exchanges.
Interesting in the section: xRapid payment system. Cryptocurrencies and banking
The answers and conclusions of the FCA include:
- Cryptocurrencies, which are called “exchange tokens” in the Guide, do not fall into the regulatory perimeter.
- Exchange tokens can be used to facilitate regulated payment services, such as international money transfers.
- All firms (market participants) that use crypto-assets to facilitate regulated payments should make sure that they have the correct permissions and comply with the relevant rules and regulations.
- Crypto-assets, unlike exchange tokens, can be used to facilitate regulated payments, in particular, stable-coins.
- Security tokens are designated as tokens that provide rights and obligations similar to specified investments and financial instruments, and, therefore, similar to traditional instruments, such as stocks, debt instruments or units in a collective investment scheme.
- Utility tokens are not regulated, unless they fall into the category of electronic money tokens.
- Changes to the Guide were made to clarify the category of non-regulated tokens. Thus, electronic money tokens are separated from the category of service tokens and security tokens, creating a category of regulated electronic money tokens and an unregulated category that includes service tokens.
- Electronic money tokens are a new, regulated category. Firms must ensure that they have the correct permissions and must comply with relevant rules and regulations.
The Guide states that it will inform you of further work, including:
- FCA consulting on a possible ban on the sale of derivatives related to certain types of unregulated crypto-assets to retail customers.
- Advice to the treasury regarding the need for further regulation of the crypto-assets market, especially regarding unregulated crypto-assets.
- The Treasury and FCA are working on the transposition of the Fifth Anti-Money Laundering Directive (5AMLD).
The UK FCA has announced its final decision on cryptocurrency regulation rules. Recall, on July 17, the UK Financial Conduct Authority (FCA) posted a vacancy on finding an employee for Crypto Intelligence Associate.
Editor: Yuliya Soroka