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As many in the industry will be aware, the Financial Conduct Authority (FCA) hosted a two-day CryptoSprint event on 10 and 11 May 2022. This event was hugely oversubscribed, but we were lucky enough to be two of the individuals picked to be one of the hundred participants from the crypto industry, financial services firms, academia, law firms, consumer groups and subject matter experts.
It was a particularly timely event following the speech of city minister John Glen MP earlier this year when he set out the government's ambition to become a global crypto asset hub. It is through events like the CryptoSprint where regulators can really have a mature conversation with industry participants and understand the impact and welcomeness of regulation in the sector. But it also poses unique challenges on how it should and actually can be regulated in practice, to ensure not only financial stability for institutional investors, but to ensure customers are well protected.
As with many of these types of events, we went in with an open mind as to how the event would unfold, how useful it would be and how the two days would develop. The FCA did a fantastic job of making sure the Sprint was a success, and covered some great themes ranging from the treatment of custody, disclosures and its regulatory approach to the issues of decentralised finance (DeFi) and how to regulate activities in this space.
It was remarkable how much convergence there was in approaches from the various and diverse members of the groups, all the way from law firms, banks, industry bodies such as UK Finance and crypto firms.
These conversations have inspired UK Finance to undertake further work in this area and we will be focusing over the next couple of months on an approach to tiered regulation for cryptoassets (in its broadest sense) for financial services. This will need to be consistent with the mantra of ‘same activity, same risk, same regulatory outcome’ and the development of our regulatory landscape outside of the EU.
UK Finance has recently set up its governance structures on central bank digital currencies (CBDCs), stablecoins and cryptoassets and we represent a diverse base of members across the financial landscape. We are here for all industry participants (including established firms, large technology firms, crypto firms and others) and therefore would encourage any firm to get in touch if they are interested in our work in this space.
It is important that the UK remains a world leader in financial services and fintech. UK Finance and its members stand ready to help government and our regulators in achieving this aim.
David Song, Principal, EU Personal Finance Policy, UK Finance
Nicole Sandler , Head of Digital Policy, Barclays