A press release by issued the UK government on June 29, confirmed that King Charles III granted Royal Assent to the Financial Services and Markets Act of 2023. The report stated that a bill comprising several reforms in UK regulation was officially passed into law on Thursday.
Guided by UK law, granting the Royal Assent is the final stage in the rulemaking process whereby the bill is officially implemented as an Act of Parliament. On June 19, it was reported that the UK upper house of parliament gave their final nod regarding the bill.
UK Introduces New Law for Crypto Assets
The new law in the UK describes crypto assets as cryptographic-oriented digital assets which operate under a regulated financial setup. Therefore the new regulatory regime in the UK will consider crypto assets as regulated financial activities.
A report from the UK Treasury confirmed that the new law aims at ensuring that crypto assets are regulated. The HM Treasury report stated that the UK regulatory agencies aim to push crypto adoption higher to cope with emerging economies.
The bill’s approval marks a significant milestone for the UK to stimulate economic development. The UK authority has labeled the law a ‘rocket boost.’
Andrew Griffith, the economic secretary at HM Treasury, stated that the new legislation grants the regulatory agencies control over financial rulebooks. He noted that the powers given to the regulators would support consumer protection and accelerate business growth.
Griffith added that by amending the existing rules drafted in Brussels, the new rules would support the opening of viable investments worth billions. He believes that having adequate capital will bolster the UK innovation and economic sector.
Scope of UK New Law
In an email statement, the co-founder of blockchain development company Sei Labs Jeff Feng praised the new law. He mentioned that recognizing digital assets in the UK is a significant step toward supporting the crypto industry’s growth. Feng highlighted that the new law recognizes crypto firms’ efforts to uphold compliance. He observed that most countries worldwide are racing to dominate the crypto and tech sectors.
Additionally, Feng asserted that the decisive regulatory approach adopted in the UK would attract new tech talents in the region. He added that the UK would rival other countries striving to shape their crypto landscape.
The Sei Labs executive predicted that there would be an upcoming global competition where most countries will compete to attract more crypto firms and entrepreneurs to their region. He claimed that most pro-crypto countries, including Singapore, the UK, and Hong Kong, have set the pace for creating a thriving crypto sector that offers employment opportunities and establishes a broader revenue stream. Unlike the US crypto laws, which lack regulatory clarity, Feng noted that the UK is racing to become a front-runner for digital assets.
According to the Financial Services and Markets Act of 2023, the new rules outline the steps for improving the blockchain sector, which will encourage the launching of sandboxes. A sandbox is a regulated environment that supports adopting emerging technologies such as blockchain and facilitates pilot trials in the financial sector.
Benefits of the New Crypto Regulation
The new law in the UK will support the implementation of Edinburgh Reforms, which contains around 30 proposals for financial regulations. The Edinburgh Reforms outlines measures necessary for replacing the old UK regulations on the financial sector.
Besides supporting the Edinburgh reforms, the new law elaborated the need for maintaining accountable, and transparent financial regulation. The bill encouraged financial regulators to keep regulatory scrutiny for digital assets to ensure that consumer assets are protected.
In April 2022, the Prime Minister of the UK, Rishi Sunak, revealed plans to create a friendly environment for the region to become a global crypto hub. The Prime Minister presented several measures that could steer the UK to becoming a global hub for digital assets.
In his proposal, Sunak proposed that stablecoins should be recognized as a legitimate payment method. He outlined the procedures for buying stablecoin per the existing UK regulations.