The plan for the regulation of crypto assets from the Ministry of Finance of the United Kingdom

It is no secret that the cryptocurrency is beginning to gain more and more popularity as a global means of settlement, and this of course could not but lead to increased interest in it from government and supervisory authorities. The news of the crypto market in February of this year is full of headlines that the Ministry of Finance of the United Kingdom has presented its own plan to regulate crypto exchanges and landing platforms.

One of the main postulates of the proposed plan is to bring all cryptocurrency exchanges to a single transparent and fair standard, which should streamline their work and make it more transparent and secure for all users - from individuals to large companies.

The UK Ministry believes that the adoption and implementation of the plan will mitigate the most serious and dangerous risks of volatility and structural vulnerabilities by bringing a number of business models in the sector in line with TradFi.

Another important goal is to tighten and make rigorous the responsibility of exchanges for drawing up detailed requirements for documents on the admission of assets and disclosure of information. This step seems especially logical after the sensational story with the collapse of FTX. Now investors and all interested parties do not want and cannot take the management of the exchanges at their word - they want concrete documentary and statistical evidence of its viability.

The rules for financial intermediaries and custodians should also be tightened, which is again aimed at reducing the risk of fraud, improving market integrity and comprehensive consumer protection. Now, according to the ministry, all these aspects of cryptocurrency processes are significantly lame, leaving extremely much room for unscrupulous market participants to maneuver.

The Deputy governor of the Bank of England, John Cunliffe, believes that cryptocurrencies should be regulated as comprehensively as traditional finance, since they are firmly rooted in all business processes and aspects of ordinary people's lives. And decentralized protocols, in his opinion, are not yet able to provide effective risk management.

In other words, Cunliffe believes that the regulatory framework for cryptocurrencies should be created in the near future, until its absence has led to serious systemic problems that will be extremely difficult to solve in the future. And the entire presented plan of the Ministry is aimed at solving this problem. Whether it will be adopted and implemented in full or in part, or the desire for strict regulation will cause a protest of market participants, it will become clear in the near future.

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