A new report from Reuters states that the recent price plunge for Bitcoin has eased the pressure on Britain’s financial watchdog to take radical action that could deter investment and financial involvement in the digital money market. The price of the world’s most popular cryptocurrency has fallen to $4,500 in recent days, down almost 20 percent in the last 7 days. UK regulators are now planning to take more time in drafting appropriate regulation.
“We want to take the time to look at that in a bit more depth and make sure we take a proportionate approach,” Gillian Dorner, deputy director for financial services at Britain’s finance ministry, told a City & Financial conference. She added that Britain is facing the challenge of balancing an innovative economy with maintaining consumer protection and thwarting financial crime.
Regulators stated during the conference that they are focusing on how cryptocurrency assets work into the pre-existing financial regulatory framework before considering reforms.
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Executive Director for Strategy and Competition at the Financial Conduct Authority Christopher Woolard said that there is a need to clarify “grey edges” around existing regulations. He reports that the FCA will meet by the end of the year to discuss where the perimeter lies between existing regulation and cryptoassets.
“This will help clarify which cryptoassets fall within the FCA’s existing regulatory perimeter, and those cryptoassets that fall outside,” Woolard explained. The finance ministry will also consider if the perimeter itself needs shifting.
Last month, a task force assembled by the finance ministry, FCA, and the Bank of England recommended a ban on the sale to retail customers of derivatives products linked to cryptoassets. However, Woolard stated that without a collaborative effort with international counterparts, the unilateral action established by a single country had obvious limitations.
With most international authorities still attempting to draw their own independent conclusions on the implications and potential concerns surrounding cryptocurrency, no collaborative consensus is expected to be reached anytime soon.
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