FCA executive director for payments and digital assets, David Geale, delivered a speech today addressing the evolving regulation of crypto, including stablecoins. Geale said they intend to create a trusted market while supporting innovation in the crypto sector.
Geale declared the UK is “open for business” regarding digital assets, adding the regulator was there to help crypto firms understand compliance with the rules.
Geale shared in prepared remarks that “cryptoassets and stablecoins are moving towards being mainstream.”
“Over 90% of people in the UK have heard about crypto, and roughly seven million currently own or have owned it at an average of just over £1,800.”
While acknowledging that crypto remains largely unregulated and that some view the advent of digital assets with suspicion, the government is now at a crossroads as it seeks to provide a regulatory ecosystem that protects consumers.
“While we are reliant on legislation to bring this to life, we are working at pace to build a proportionate, sustainable regime that works. One that is competitive, built for the future and ready for firms – and that allows consumers to make informed decisions and understand both what they are getting into and the limits of consumer protection.”
Geale expressed his desire that firms reach out to the FCA as they craft new rules.
Geale also revealed a new stablecoin cohort for their Regulatory Sandbox.
As the concept of central bank digital currency (CBDC) has declined in popularity amid concerns about government intrusion and ineptitude, the idea of privately issued digital currency is on the rise.
Geal said that it’s a “unique chance for innovative firms to test their stablecoin products and services under the UK’s evolving regulatory regime – potentially driving new ideas to benefit both wholesale and retail customers.”
We must have the regulation in place to allow for innovation, said Geale.
With the US pushing forward with comprehensive rules to enable stablecoins and market infrastructure to allow the “tokenization” of assets alongside other crypto offerings, the UK is compelled to hop on board. The UK has long been a top global Fintech Hub, and digital assets are now driving financial innovation. While bespoke rules are absolutely needed, broader policy questions may support or impede crypto innovation in the UK. Today’s Autumn Budget and its economic policy will be key to the future of Fintech development in the UK.