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UK Cryptocurrency Regulations Could Take up to Two Years Based on Comparable Regulatory Extensions

UK Cryptocurrency
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UK regulation of the cryptocurrency market would take two years to introduce based on comparable extensions of the FCA’s remit. James Kaufmann, Legal Director at RPC says that this based on the best-case scenario where proposals in the recent House of Commons Treasury Committee report* start to be progressed. The process of introducing the necessary regulations, along with the required consultation period, is lengthy.

Past precedents show it can take years to make relatively minor regulatory changes to the financial regulatory regime. For example, it took two and a half years from the Treasury’s original announcement (10 May 2004) for the regulation of home reversion plans to come in force (6 November 2006).

To regulate cryptocurrencies, HM Treasury need will to:

  • Assess which specific activities related to cryptocurrencies need regulating perhaps with market study
  • Draft proposed regulations open to consultation
  • After the consultation period has closed, publish changes and set an implementation date

James Kaufmann says: “Even if MP’s latest proposals were fast tracked, it could still take years for regulations to cover the UK cryptocurrency market that treads the middle ground between protecting retail participants and allowing the UK’s cryptocurrency market to thrive.”

“Bringing a complex and fast evolving area like cryptocurrencies into a regulatory framework is going to be a difficult and lengthy process. Added to this, big issues like Brexit are already occupying a lot of regulator’s time.”