The United Kingdom House of Lords today passed the Financial Services and Markets Bill, marking a major step in the country’s efforts to regulate crypto-assets and their providers.
Introduced on July 20, 2022, this legislation could have a significant impact on the cryptocurrency markets. With the passage of the House of Lords, the bill is now one step closer to becoming law.
Introduced last year to capitalize on post-Brexit opportunities and empower financial regulators, the FSMB initially included a provision for regulating stablecoins under national payment rules. However, as the bill passed through parliament, amendments were included to treat all cryptocurrencies as regulated activities, along with measures to oversee crypto promotions.
The bill, a follow-up to the government’s “Future Regulatory Framework” review, is seen as a comprehensive agenda for substantial shifts in the financial services industry, including the repeal and replacement of all laws and regulatory requirements stemming from EU action in the wake of Brexit.
Crypto Regulations
Of particular importance to the cryptocurrency sector is the enactment of legislation regulating crypto-assets and their providers. This new development in UK law represents a serious attempt to introduce regulatory oversight into an industry known for its laissez-faire attitude. The move is expected to bring greater transparency and stability to the often volatile cryptocurrency markets.
The bill also aims to regulate “Buy Now, Pay Later” products and their providers, with the aim of improving consumer protection. At the same time, it guarantees the maintenance of access to cash, which is essential for demographics that still rely on physical currency.
In addition, it introduces the prospect of mandatory refunds for victims of Authorized Push Payment (APP) scams. APP scams are a common problem in the UK, with the bill aiming to tighten controls on those who approve financial promotions for others, giving more accountability to the financial ecosystem.
As the bill continues its journey through the parliamentary process, several consultations on its provisions are underway. Some aspects are expected to lead to heated discussions, while other provisions are likely to be quickly integrated into the regulatory system.
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