The UK needs regulatory clarity that matches ambition
The UK is at a crossroads in its approach to digital assets, aiming to establish itself as a leading global crypto hub. However, regulatory development has been slow and fragmented, risking a loss of capital, talent, and innovation to more proactive jurisdictions like the US and Singapore. The UK government, alongside the Financial Conduct Authority (FCA), needs to create clear and progressive legislation to foster a healthy market environment. While the FCA has engaged actively with the crypto sector, providing guidance and setting a phased regulatory roadmap, the government’s Draft Statutory Instrument offers only modest progress. Concerns remain regarding the regulatory definition of decentralized finance (DeFi) and compliance burdens for smaller firms, which may deter firms from operating in the UK. A more proactive alignment between bold ambitions and practical implementation is essential to maintain competitive advantage amidst swift global regulatory developments. Without timely action that accommodates industry feedback, the UK risks falling behind in the global crypto economy.
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