UK Unveils Comprehensive Regulations for Crypto and Stablecoins

The UK government has published its final proposals for regulating the crypto ecosystem, aiming to make the country a preferred destination for the industry. The phased introduction of regulation will begin with legislation for fiat-backed stablecoins in early 2023, followed by other crypto areas such as algorithmic stablecoins. The Financial Conduct Authority (FCA) will oversee these activities, bringing them under conventional financial regulation. The government clarified that traditional securities and certain non-fungible tokens (NFTs) will not be subject to financial services regulation, but NFTs used as exchange tokens may fall within future rules. The FCA will soon consult on an authorization regime for crypto companies, and the government plans to formulate equivalence measures for overseas firms. The government also stated it does not intend to ban decentralized finance (DeFi).