IMPORTANT POINTS:
- The UK has passed a law regulating cryptocurrencies as a financial activity.
- The law gives power to regulators to govern cryptocurrencies and stablecoins.
- Regulatory rules for the cryptocurrency sector could be implemented within the next 12 months.
The United Kingdom has officially passed a law that recognizes cryptocurrencies as a regulated financial activity within the country. In fact, the Financial Services and Markets Act 2023 has officially become law after receiving royal assent from His Majesty King Charles on Thursday.
In a press release issued today, the government called the law “central” to its vision “to grow the economy and create an open, sustainable and technologically advanced financial services sector.” Furthermore, this represents a pivotal moment for the digital asset industry in the country.
Cryptocurrency Law Receives Royal Assent
The UK has officially passed a law that recognizes cryptocurrencies as a regulated financial activity in the country and represents a vital development. Specifically, the law gives regulators the power to govern cryptocurrencies and stablecoins at a time of great inflection. Indeed, the final step in the legislative process was actual approval, which took place on Thursday.
Royal assent is the procedure necessary for legislation to become law within the country. Furthermore, this development has made the Financial Services and Markets Act an Act. It was passed by the House of Parliament last week. Finally, King Carlos approved the legislative action today.
Impact of the UK Cryptocurrency Act
Andrew Griffith, Economic Secretary of the Treasury, spoke about the decision. He stated:
“This landmark piece of legislation puts us in control of our financial services rulebook, so it supports UK businesses and consumers and drives growth.”
On the other hand, the law was first introduced in July 2022 and reformed the traditional power of regulators over the financial system. Subsequently, it now gives them the regulatory power to govern the digital asset industry as well.
Finally, the law allows the UK Treasury, the Financial Conduct Authority, the Bank of England and the Payment System Regulation Authority to introduce and enforce regulatory standards in the industry. Now, the development of those rules should start to take effect. Griffith told CNBC that cryptocurrency industry rules could be implemented in the next 12 months.
