Innovate Finance has responded to the UK Financial Conduct Authority’s (FCA) consultation DP 24/4 on Regulating cryptoassets: Admissions & Disclosures and Market Abuse Regime for Cryptoassets.
According to UK Finance, the regime is an important one, essentially regulating so-called “Shit Coins” that offer little or no “intrinsic value or practical use.”
These are typically associated with projects “lacking credibility, transparency, or a clear purpose, often created solely to make quick profits rather than contributing meaningfully to the cryptocurrency landscape.”
In the response, Innovate Finance argue for a UK regime “that is both globally competitive and innovation-friendly.”
Innovate Finance also strongly make the point that the FCA’s regulatory approach should be “centered on the Consumer Duty as the starting point – as described by their CEO Nikhil Rathi in his letter to the Prime Minister – moving away from prescriptive, tick-box regulations.”
To support this, the FCA should provide “non-binding guidance to help firms understand what the regulators expectations are.”
Finally, they also highlight the importance of “realistic implementation timelines, emphasizing that these must account for the time needed to develop essential ecosystem infrastructure and services.”
Innovate Finance further noted that the UK should strive for the world’s crypto-asset framework, built “on the foundation of their legal and political stability and this requires a clear focus to deliver proposals which support growth and competitiveness.”
As covered recently, the Digital Pound Foundation (DPF) has merged with Innovate Finance.
Innovate Finance is an advocacy group that supports and promotes the growth of Fintech in the UK.
DPF is playing a similar role but for advocating on behalf of a digital pound or CBDC and other digital assets. According to their website:
“Our aim is to support the wider understanding of new forms of digital money, whether that’s in the form of central bank digital currencies (CBDC), stablecoins, tokenized deposits, or otherwise.”
HM Treasury and the Bank of England continue to review the potential for a digital pound as well as a stablecoin framework.
Stablecoins are privately issued digital assets that are tied to other assets, largely fiat currency.
