The UK Financial Conduct Authority (FCA) is opening discussion avenues with the public and industry sectors concerning crypto regulation in the country. According to a statement released by the regulatory body, the move is to address crypto regulatory issues like market abuse and financial fraud.

A post on X by the Digital Pound Foundation gives more details about the discussion paper. The post highlighted the aim of FCA’s proposals and clamoured for crypto stakeholders, organizations, and fintechs to be part of the discussion, which will last until 14 March 2025.

Similar to the expression in the X post, many other crypto experts and organizations have been responding positively to FCA’s invitation. Current sentiment is that the collaboration between the FCA and crypto stakeholders would create a balanced regulatory framework where crypto thrives in a safe environment. 

It’s important to note that the announced discussion between the FCA and crypto stakeholders has already started on Dec. 16, 2024, and is scheduled to continue until March 14, 2025. At the forefront of the discussion agenda, the FCA claims it is seeking input from firms, legal experts, and individuals in future regulations. 

They emphasized this in their statement release, stating that:

We want to develop a crypto regime that is fair, balanced, and proportionate for all. We need input from the government, our international partners, industry, and consumers to help us get the future rules right.

Looking closely at the FCA’s statement, the proposals revolve around implementing measures that facilitate fair trading practices and improve transparency. We believe the regulatory body is planning to finally annex the economic power of cryptocurrencies by building a trusted and sustainable crypto market in the UK.

How will they achieve this? The FCA highlighted an alliance with crypto companies as the key player in their plan. 

An excerpt of what the regulatory body said in their statement release reads, “We are also suggesting certain firms, like authorised crypto trading platforms, share information with each other to help stop suspected market abuse. This will reduce fraud and help promote good practices in the sector.”

Additionally, FCA hinted towards efforts to increase regulations against unregistered crypto firms and the proliferation of fraudulent tokens. This is to say that the regulatory body is looking to allow specific exemptions to compliant platforms concerning the public offering of cryptos. 

Now to the big picture, the FCA-led consultation is just one step towards the UK government’s goal of creating a comprehensive legal framework for crypto. Since initial plans commenced in 2023, the framework is expected to eventually cover asset custody, stablecoin oversight, trading activities, and more.

If the consultation is successful and all things go as planned, we could see a release of a draft regulation from the FCA by 2025. However, the journey to full implementation of the regime won’t start until 2026. 

Yet, it's mind-boggling to see the FCA change from a banning-based stance on crypto to wanting to work with crypto stakeholders. Well, a post on X by Crypto Wawa seems to offer some insights; it reads thus, “Well, it all comes down to protecting investors and ensuring financial stability. With the rapid growth of crypto, regulators want to ensure everyone's playing fair.” 

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