The UK’s financial regulator plans to step up enforcement action, with widespread damage to what it calls ‘problem companies’ in financial services.
The Financial Conduct Authority announced on Thursday that it will add 80 employees to pursue businesses that do not meet basic regulatory standards in all sectors, as it has set out its strategy for the next three years. It will also formulate new rules for covering crypto assets, including stable currencies, backed by traditional assets.
Crypto groups have criticized the regulator for what they see as an overly restrictive approach, and the government this week announced its plans to turn the UK into Digital Funding Center. But the regulator’s cautious stance underscores his position that standards should not be compromised.
“Risks to consumers and the market need to be properly reduced. This may require further regulation of crypto assets as the industry develops,” the FCA said.
The Treasury said this week that it intends to put stablecoin coins under the regulator’s authority if they are used for payments. The FCA said it would consult later this year on arranging these tokens.
“Crypto assets have been a significant focus for the regulator. Having said that, it is likely that those in the crypto asset industry will not agree with this approach,” said Siddur Rahman, a partner at the law firm of Rahman Ravli. “Tighter regulation could eradicate privacy [and] To engage in innovation. “
The FCA said it supports innovations in financial services as long as they have “apps that are in the public interest,” noting that stablecoin payments can reduce fees and make transactions smoother.
Stablecoin currencies have traditionally been used primarily to purchase more volatile cryptocurrencies like Bitcoin, but issuers have increasingly pushed the currencies as tools for faster transfers and transfers.
The rapid growth of the stablecoin market – which rose from a value of $ 7 billion to almost $ 190 billion within two years according to the CoinGecko cryptocurrency data site – has led to concerns about its potential impact on monetary policy and financial stability.
The Bank of England’s fiscal policy committee warned last month that if the Stablick currency did indeed receive widespread adoption of payments, fluctuations in its value could threaten wider financial markets and called for a regulatory framework to reduce these risks.
A group of senior U.S. regulators and the Treasury Secretary said “Legislation was urgently needed” In a report released in November.
The lack of clarity around the reserves backed by some stable currencies is among regulators’ concerns. According to the latest report from market leader Tether testimonyAt the end of 2021 it still held a significant amount of its reserves in commercial papers, a type of short-term debt, of unknown origin or nationality.
The FCA said it would ensure crypto companies comply with anti-money laundering regulations and promised to intervene “in places where companies are harming consumers or the integrity of the market.” It should have new powers to oversee the promotion of digital assets.
“Currently, crypto assets are regulated only in the UK for money laundering purposes, and we have no powers of conduct or consumer protection for the industry,” the regulator said.
The government said earlier this week that it would launch a consultation on a broader set of regulations for the digital assets market. Sarah Pritchard, the FCA’s marketing director, said the regulator “will continue to work closely with the government ahead of its consultation” on developing rules for crypto activities.
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UK financial regulator to boost enforcement operations against ‘problem firms’ Source link UK financial regulator to boost enforcement operations against ‘problem firms’