UK to establish crypto regulations within 12 months, says economic secretary

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The Central Bank of Ireland granted virtual asset service provider (VASP) authorization to Kraken, a cryptocurrency exchange based in the United States, on April 18. This approval comes at a crucial time for Kraken as the long-awaited Markets in Crypto Assets (MiCA) regulation is ready to go to the final vote in the European Union. Any business functioning as a crypto assets service provider (CASP) in the EU must register with one of the 27 authorized regulators of the union if it is permitted. After being sued, Kraken agreed to stop providing staking services to clients in the United States and paid fines totaling $30 million. After an 18-month transition period, full implementation of the measures is anticipated in Q3 2024, if approved.

Kunji Research crypto market update

According to a CNBC interview, the UK may establish regulations governing digital assets over the next 12 months. The long-term goal, according to Andrew Griffith, the economic secretary to the U.K. Treasury, is to “let firms make the most of the opportunities from crypto assets” through sensible regulation. He gave the example of fiat-backed cryptocurrencies used for settlement, which was part of the financial services bill. The potential introduction of the “Britcoin”-named digital currency that the U.K.’s central bank has proposed has a significantly longer “lead time” and won’t happen within the next year, according to Griffith. The CEO of cryptocurrency exchange Coinbase, Brian Armstrong, met with Griffith earlier this week to discuss how the U.K. could “turbocharge” its cryptocurrency industry and turn it into an “innovation hub for the Web3 economy.” Since Gary Gensler assumed leadership of the Securities Exchange Commission in April 2021, the United States has also increased enforcement actions relating to cryptocurrencies.

Distributed ledger technology (DLT) has been successfully tested by the Bank of England and the Bank for International Settlements to accelerate and lower the cost of transactions in real-time gross settlement (RTGS) systems used by central banks. The project’s use of DLT enabled it to automatically coordinate the exchange of ownership of funds and assets in a secure and robust manner by connecting the RTGS system of the central bank with other financial market infrastructures and ledgers. The prototype has been adapted to other asset classes, like foreign exchange, by the BIS Innovation Hub, which is focused on studying new advances in fintech, from decentralized finance to CBDC systems. Such systems need to be implemented, therefore “policy, regulatory, and legal” concerns are needed.

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