Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment has he made of the adequacy of the capacity of the Financial Conduct Authority to regulate cryptocurrencies.

Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)

The government is proposing an approach to cryptoasset regulation under which firm requirements are designed and implemented by the independent regulators to ensure an agile regime able to respond to developments in the sector. The recent Financial Services and Markets Act included powers to bring stablecoins and cryptoasset activities within the FCA regulatory perimeter.

The FCA completed its Transformation Programme in March 2023 seeking to make the FCA a more innovative, assertive and adaptive regulator. It involved significant investment in the FCA’s systems and capabilities to enable better use of data and intelligence to regulate 50,000 firms effectively and efficiently. Further information on the delivery of the Transformation Programme is contained in the FCA Annual Report 2022-2023

The Government will continue to regularly discuss delivery of the Transformation Programme with the FCA to monitor progress.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether his Department plans to give the Financial Conduct Authority further powers to regulate crypto-related companies.

Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)

HMT published a public consultation on 1 February 2023 on the ‘Future financial services regulatory regime for cryptoassets’, outlining how the Government will set the regulatory perimeter for the FCA to make rules regulating crypto-related companies. Under these proposals, firms providing cryptoasset services would need to become FCA authorised and meet a range of new requirements, including (for example) prudential, data reporting, consumer protection, location policy and operational resilience requirements.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment his Department has made of the adequacy of regulation of crypto-currencies.

Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)

The government believes that having robust and effective regulation will boost innovation - by giving people and businesses the confidence they need to use new technologies safely

A consultation on the future financial services regulatory regime for cryptoasset activities was published here: https://www.gov.uk/government/consultations/future-financial-services-regulatory-regime-for-cryptoassets on Wednesday 1 February.

In addition to this, the Financial Services and Markets Bill ensures that the Treasury can establish the legislative framework for regulating cryptoassets and stablecoins.

The government has already taken steps to bring certain cryptoasset activities into the scope of UK regulation. Since January 2020, cryptoasset firms operating in the UK have been subject to the Money Laundering Regulations. To protect consumers, on 18 January 2022, the Government set out its intention to legislate to bring certain cryptoassets into financial promotion regulation and published a further policy statement here: https://www.gov.uk/government/consultations/cryptoasset-promotions on Wednesday 1 February.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether his Department has made a recent assessment of the potential merits of introducing further regulations for (a) cryptocurrency exchanges and (b) other aspects of cryptocurrency markets.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The UK is committed to creating a regulatory environment in which firms can innovate, while crucially maintaining financial stability and regulatory standards so that people and businesses can use new technologies both reliably and safely.

The Financial Services and Markets Bill will bring stablecoins within the regulatory perimeter where they are used as a form of payment. This legislation will ensure that the UK’s regulatory framework is equipped to harness benefits of stablecoins, supporting the adoption of cutting-edge technologies, while mitigating the potential risks.

HM Treasury will consult on an approach to regulating a wider set of cryptoasset activities in the coming weeks.

The Financial Services and Markets Bill also ensures that cryptoassets may be regulated within the existing financial services regulatory framework.

In addition to this, in January 2022 the government published a response to a consultation on a proposal to bring certain cryptoassets into the scope of financial promotions regulation. The forthcoming legislation, and supporting FCA rules, will regulate in-scope cryptoasset financial promotions, requiring them to be fair, clear and not misleading.

Question to the HM Treasury:

To ask Her Majesty's Government what plans they have to discuss an approach to crypto-asset regulation with other countries and international bodies.

Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)

As set at out Fintech Week in April, the UK is committed to establishing a world-leading regulatory regime for cryptoassets. Given the cross-border nature of cryptoassets, the UK is committed to working with other jurisdictions and through the international standard-setting bodies to support harmonisation of treatment as far as is feasible.

HM Treasury is engaging extensively with international partners on cryptoasset regulation on a bilateral basis. For example, HM Treasury hosted the Regulatory Pillar of the Financial Innovation Partnership with the US Treasury in June. Attendees exchanged views on cryptoasset regulation and market developments, including recent developments in relation to stablecoins and the exploration of central bank digital currencies (CBDCs).

The UK is also active in international work on cryptoassets being carried out through global fora, including the G7, G20, OECD, IMF and the Financial Stability Board (FSB).

Question to the HM Treasury:

To ask Her Majesty's Government what plans they have to create a bespoke regulatory framework for the UK cryptoasset sector.

Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)

At Fintech Week 2022, the Government set out our firm ambition to make Britain a global hub for cryptoasset technology and investment. The UK is committed to creating a regulatory environment in which firms can innovate, while crucially maintaining financial stability and regulatory standards so that people can use new technologies both reliably and safely.

The UK is taking a dynamic approach to engagement with the industry, and the government has committed to consult later this year on the broader regulation of cryptoassets, as part of a staged approach to developing a world-leading regime for cryptoasset activities.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent discussions he has had with (a) the Secretary of State for Digital, Culture, Media and Sport, (b) the Gambling Commission and (c) the Financial Conduct Authority on the regulation of crypto-based products and services.

Answered by Richard Fuller

Treasury Ministers and officials have meetings with a wide variety of organisations in the public and private sectors as part of the process of policy development and delivery.

The Cryptoasset Taskforce, comprising HM Treasury, the Bank of England, the Financial Conduct Authority (FCA), and the Payment Systems Regulator (PSR), continues to monitor ongoing development in cryptoasset markets, and is taking forward a range of regulatory measures to mitigate market integrity risks, protect consumers and support innovation in the cryptoasset market.

Since January 2020, cryptoasset firms operating in the UK have been subject to the Money Laundering Regulations. To protect consumers, on 18 January 2022, the government set out its intention to legislate later this year to bring certain cryptoassets into financial promotion regulation. This would ensure that relevant cryptoasset promotions are held to the same high standards for fairness, clarity and accuracy that exist in the financial services industry. Additionally, on the 20 July, the government introduced the Financial Services and Markets Bill, which includes a measure allowing HM Treasury to bring stablecoins, where used as a means of payment, within the UK regulatory perimeter.

The government has committed to consult later this year on the broader regulation of cryptoassets.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, which industry stakeholders his Department met with ahead of the 4 April 2022 announcement on the regulation of crypto-assets.

Answered by Richard Fuller

Treasury Ministers and officials have meetings with a wide variety of organisations in the public and private sectors as part of the process of policy development and delivery.

Details of ministerial and permanent secretary meetings with external organisations on departmental business are published on a quarterly basis and are available at: https://www.gov.uk/government/collections/hmt-ministers-meetings-hospitality-gifts-and-overseas-travel.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, pursuant to the Answer of 13 June 2022 to Question 11630 on Cryptocurrencies: Regulation, what assessment he has made of the (a) adequacy of existing skills and qualifications and (b) requirement to acquire further skills of brokers who (i) are already regulated and compliant with Money Laundering Regulations and (ii) do not intend to custody cryptoassets themselves but instead use a registered cryptoasset firm.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

It is the responsibility of the FCA to assess whether cryptoasset firms have appropriate anti-money laundering controls.

As part of this assessment, firms must demonstrate they have the necessary skills and qualifications. Firms must also demonstrate they have proper policies and procedures in place to deal with the specific nature of the cryptoasset ecosystem. Where either is assessed to be below the required standard, they may have their application rejected or refused.

The Money Laundering Regulations established a risk-based approach to the supervision of cryptoasset businesses. The assessment which each firm must undergo is therefore proportionate to the risks generated by the kind of activities firms engage in.

This means that whether the broker holds cryptoassets themselves or uses a registered cryptoasset firm, the skills & procedures required will likely be different from those that a large cryptoasset exchange is expected to demonstrate.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he plans to introduce regulation on (a) cryptocurrencies and (b) other decentralised financial assets in the UK.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The UK is committed to creating a regulatory environment in which firms can innovate, while crucially maintaining financial stability and regulatory standards so that people can use new technologies both reliably and safely.

The Government has already taken forward a series of regulatory measures to protect consumers, manage market integrity risks and support innovation. Since 2020 the FCA has been the anti-money laundering supervisor for cryptoasset firms. In January 2022 the Government confirmed the intention to bring certain cryptoassets into the scope of the Financial Promotion Order to ensure that cryptoasset promotions are fair, clear, and not misleading.

On April 4 the Government published its response to its 2021 consultation on the UK’s regulatory approach to stablecoins. It also included a call for evidence on the use of Distributed Ledger Technology (DLT) in financial markets. The legislation to bring stablecoins, where used as a means of payment, within the regulatory perimeter is expected to be part of the forthcoming Financial Services and Markets Bill announced in the Queen’s Speech on 10 May. The Bill will be introduced later in the session when parliamentary time allows.

Further, the Government considers that some cryptoassets may already fall within the relevant UK legal frameworks. However, this also depends on the structure of the token and nature of the activities concerned.

At Fintech Week 2022, the Government announced its commitment to consult on a world-leading regime for a broader set of cryptoasset activities this year.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has had discussions with representatives from the UK banking sector on ensuring that reputable and regulated digital asset companies can secure business bank accounts in the UK.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The government set out at Fintech Week our firm ambition to make Britain a global hub for cryptoasset technology and investment. The government wants to ensure firms can invest, innovate and scale up in this country. And the government have announced a number of reforms which will see the regulation and aspects of tax treatment of cryptoassets evolve – our clear message to cryptoasset firms is that the UK is open for business.

These include committing to consult on a future regulatory regime later this year; legislating to bring stablecoins into payments regulation; setting up a ministerial-chaired Cryptoasset Engagement Group, bringing together key figures in industry; working with the Royal Mint to create a Non-Fungible Token; and exploring ways of enhancing the competitiveness of the UK tax system to encourage further development of the cryptoasset market in the UK.

HM Treasury holds regular discussions with the Financial Conduct Authority (FCA) on a range of issues regarding the regulation of financial markets, including cryptoassets.

The government established a Cryptoassets Taskforce in 2018, consisting of HM Treasury, the Bank of England, the Payment Systems Regulator (PSR) and the FCA. The Taskforce’s objectives include exploring the impact of cryptoassets, the potential benefits and challenges of Distributed Ledger Technology (DLT) in financial services; as well as assessing what, if any, regulation is required in response.

The decisions about what products are offered, including commercial accounts, and to whom remain commercial decisions for banks and building societies.

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has had recent discussions with Financial Conduct Authority on steps to create a conducive operating environment for cryptoasset companies in the UK.

Answered by John Glen - Paymaster General and Minister for the Cabinet Office

The government set out at Fintech Week our firm ambition to make Britain a global hub for cryptoasset technology and investment. The government wants to ensure firms can invest, innovate and scale up in this country. And the government have announced a number of reforms which will see the regulation and aspects of tax treatment of cryptoassets evolve – our clear message to cryptoasset firms is that the UK is open for business.

These include committing to consult on a future regulatory regime later this year; legislating to bring stablecoins into payments regulation; setting up a ministerial-chaired Cryptoasset Engagement Group, bringing together key figures in industry; working with the Royal Mint to create a Non-Fungible Token; and exploring ways of enhancing the competitiveness of the UK tax system to encourage further development of the cryptoasset market in the UK.

HM Treasury holds regular discussions with the Financial Conduct Authority (FCA) on a range of issues regarding the regulation of financial markets, including cryptoassets.

The government established a Cryptoassets Taskforce in 2018, consisting of HM Treasury, the Bank of England, the Payment Systems Regulator (PSR) and the FCA. The Taskforce’s objectives include exploring the impact of cryptoassets, the potential benefits and challenges of Distributed Ledger Technology (DLT) in financial services; as well as assessing what, if any, regulation is required in response.

The decisions about what products are offered, including commercial accounts, and to whom remain commercial decisions for banks and building societies.

Found: Cryptocurrencies: Regulation Asked by: Lord Taylor of Warwick | Party: Non -affiliated 01 Aug 2022

Found: Cryptocurrencies: Regulation Asked by: Lord Taylor of Warwick | Party: Non -affiliated 22 Jul 2022

Found: Cryptocurrencies regulation - stablecoins 6.