The UK cryptocurrency business earned another boost on Thursday when the Financial Services and Markets Act 2023 became law. The act, a watershed moment in the United Kingdom’s independent financial legislation following its exit from the European Union, encourages the regulation of crypto-assets to encourage their wider usage. The Act also establishes new goals for the UK’s regulatory authorities, such as the Financial Conduct Authority and the Prudential Regulation Authority. By requiring regular reporting and emphasizing cost-benefit evaluations, the measures aim to increase regulatory scrutiny and accountability.
The Bill Puts UK Cryptocurrency Under the Jurisdiction of Financial Regulators
The UK government expects that by abolishing EU legislation, the Act will increase investment and economic growth. Few individuals doubt the necessity of such an event. The country has struggled to recover from the COVID-19 pandemic, having the highest inflation rate in the G7.
According to the Office of National Statistics (ONS), the UK economy remained stagnant in the first quarter of 2023, with GDP growth of only 0.1%. Worse, the monthly forecasts show a 0.3% fall in March 2023, following a 0.5% increase in January and no growth in February.
The bill will also allow the Edinburgh Reforms, a package designed to improve the financial services sector, to be implemented. Learn about the cost-benefit analysis of crypto and digital asset regulation: What Are the Advantages and Disadvantages of Crypto Regulation?
Crypto assets such as stablecoins will fall under the jurisdiction of the country’s financial regulators under the new regime. It also creates “sandboxes” to allow for the safe implementation of emerging technologies such as blockchain in financial markets. Economic Secretary to the Treasury Andrew Griffith said in a statement that 2023 is shaping up to be a “banner year” for financial reforms. He went on to say:
OpenAI Recently Announced It Is Setting up in London
Since Rishi Sunak, the country’s current prime minister, joined the Finance Ministry in 2019, the government has been attempting to position itself as a crypto hub. Sunak has been very supportive of the business and has cheered the news of enterprises relocating to Britain. The country is also becoming a center for the broader tech industry. OpenAI, the startup behind ChatGPT, announced this week that it would open its first overseas office in London. The headquarters of the corporation are in San Francisco, California.
Despite the obstacles of Brexit, the United Kingdom (and, more specifically, London) remains the continent’s tech powerhouse. After the United States and China, the country became the third in the world last year to boast a $1 trillion IT sector.