FCA to launch regulatory review of cryptocurrencies

The UK's financial services regulator will publish its policy thinking later this year

Bitcoin cryptocurrency mining

The Financial Conduct Authority (FCA) will publish a regulatory review on cryptocurrencies later this year as part of a joint taskforce with the Treasury and the Bank of England.

Although cryptocurrency is not within the FCA's remit, the UK's financial regulator explained some models of use or packaging may bring them within its perimeter, noting the landscape was complex.

In its Business Plan 2018/19, the FCA said: "Cryptocurrencies has been an area of increasing interest for markets and regulators globally. In the UK, the Treasury Committee has announced that it will be launching an enquiry, to which we intend to respond."

The FCA confirmed in its business plan it had issued consumer warnings on cryptocurrency Contracts for Different and the risks of Initial Coin Offerings (ICOs) last year, adding it would work as part of a taskforce with the Bank of England and the Treasury to develop its thinking around the wider cryptocurrency market.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

The announcement comes days after the UK's financial services regulator issued a statement warning firms that offering derivatives referencing cryptocurrencies, or tokens issued through ICOs, would need FCA authorisation.

The statement read: "It is firms' responsibility to ensure that they have the appropriate authorisation and permission to carry on regulated activity. If your firm is not authorised by the FCA and is offering products or services requiring authorisation it is a criminal offence.

"Authorised firms offering these products without the appropriate permission may be subject to enforcement action."

Nigel Green, the founder and chief executive of financial consultancy firm deVere Group, welcomed the FCA's prospective cryptocurrency review, labelling it "one of the most impactful and far-reaching regulatory reviews in modern times", and one that would permanently shape the cryptocurrency market.

Green said: "In our increasingly tech-driven, digital age, cryptocurrencies are here to stay; they simply can no longer be ignored. Therefore, the FCA's proactive approach towards the crypto market must be welcomed as it will help protect investors and tackle illicit activity and unscrupulous firms.

"I expect the regulator to issue warnings and this caution should also be championed as these digital assets remain highly speculative and the market relatively new."

Advertisement - Article continues below

Due in the second quarter of 2018/19, the discussion paper will outline the FCA's policy thinking on cryptocurrencies as the cryptocurrency market continues to expand at a quickening pace.

Featured Resources

Digitally perfecting the supply chain

How new technologies are being leveraged to transform the manufacturing supply chain

Download now

Three keys to maximise application migration and modernisation success

Harness the benefits that modernised applications can offer

Download now

Your enterprise cloud solutions guide

Infrastructure designed to meet your company's IT needs for next-generation cloud applications

Download now

The 3 approaches of Breach and Attack Simulation technologies

A guide to the nuances of BAS, helping you stay one step ahead of cyber criminals

Download now
Advertisement

Most Popular

Visit/business-strategy/public-sector/354608/uk-gov-launches-ps300000-sen-edtech-initiative
public sector

UK gov launches £300,000 SEN EdTech initiative

22 Jan 2020
Visit/operating-systems/25802/17-windows-10-problems-and-how-to-fix-them
operating systems

17 Windows 10 problems - and how to fix them

13 Jan 2020
Visit/business-strategy/mergers-and-acquisitions/354602/xerox-to-nominate-directors-to-hps-board-reports
mergers and acquisitions

Xerox to nominate directors to HP's board – reports

22 Jan 2020
Visit/web-browser/30394/what-is-http-error-503-and-how-do-you-fix-it
web browser

What is HTTP error 503 and how do you fix it?

7 Jan 2020