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GM, Joanna here.
UK’s financial watchdog has not approved a single crypto firm in over a year.
That doesn’t mean it is hostile to the industry, Coinbase vice president of international policy Tom Duff Gordon told me.
“The Financial Conduct Authority is doing a good job to provide the guardrails, using the financial promotions regime and other tools,” he said.
That’s not a popular opinion among some UK crypto boosters, many of whom say the FCA is dashing dreams of turning Britain into a crypto hub.
Stringent rules on the marketing of crypto products and services deter firms from registering, they say.
The regulator says firms can’t meet its requirements, and anti-money laundering controls are especially weak.
For Gordon, the FCA’s caution is appropriate.
“They’re approaching this industry in a responsible manner to make sure they have the players in the market they want to see, and that’s a prudent perspective to take,” he said.
The crypto exchange is already registered, and the UK is seen as a key market. Financial regulation often benefits larger players as they can afford large legal and compliance teams.
As regulations roll out, the crypto services landscape in the UK and Europe will look very different, with larger players gaining a foothold and absorbing smaller firms.
This will soon become apparent in the European Union, Gordon said, as countries favouring light-touch regulation must implement the new bloc-wide Markets in Crypto Assets regulation.
New legislation also helps global businesses set up shop, said Gordon.
The FCA is busy drafting rules tackling stablecoin issuance, crypto exchanges and perhaps even some aspects of the non-fungible token industry.
The Conservative government promised those rules by mid-year, but a snap election disrupted the timeline.
Gordon still hopes to see those rules out this year — though lobbyists’ predictions say it’s more likely to be early next year.
Reach out to me at joanna@dlnews.com.