HM Treasury consultation responses on the future UK cryptoasset regulatory framework

HM Treasury announced three separate publications yesterday, each concerning aspects of the UK’s future cryptoasset regulatory framework. These are each significant steps which will provide important clarity as to the UK’s approach to cryptoasset regulation, including implementation timelines. We will be following up with further detail and analysis over the coming weeks.

Future financial services regulatory regime for cryptoassets: Response to the consultation and call for evidence 

HM Treasury provides its response to industry feedback following its February 2023 consultation on the future financial services regulatory regime for cryptoassets. Responses cover numerous areas of the Treasury’s original proposals and whilst not indicating any wholesale change of direction, provide valuable clarity on the direction of travel. Key topics include the territorial scope of the regime, the timelines for implementation of phases 1 and 2 and the treatment of certain cryptoassets like Non-Fungible Tokens.

Read the full consultation here.

Update on Plans for the Regulation of Fiat-backed Stablecoins

HM Treasury gives an update following its initial April 2022 response on the regulation of stablecoins.  This update provides a number of valuable insights as to potential future legislation based largely on the existing UK e-money regime, including the manner in which stablecoin issuance, custody and payment services will be regulated, and further thoughts on how the various components of the stablecoin payment chain may fall within the regulatory perimeter. The update also summarises the development of the Bank of England’s oversight of ‘digital settlement assets’ and the Payment Systems Regulator’s role, alongside the FCA and Bank of England, in the oversight of systemic fiat-backed stablecoin firms.

Read the full consultation here.

Managing the failure of systemic digital settlement asset (including stablecoin) firms: Government response to consultation

HM Treasury responds to its May 2022 consultation on the application of the Financial Market Infrastructure Special Administration Regime (the FMI SAR) to systemic payment systems and providers of systemic importance to those systems, where they facilitate transactions in digital settlement assets. The publication explains that feedback from industry has been broadly positive, but that further detail would need to be developed in regulations, including on how the administrator of an insolvent in-scope firm would return or transfer customer funds and custody assets.

Read the full consultation here.

If you have any questions on these publications, please reach out to your usual A&O contact.

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