How British Financial Regulator Creates A Foundation For UK Cryptocurrency Adoption

pubblicato su by Cointele | pubblicato su

Traditional financial institutions and big banks in the UK haven't been overly supportive of cryptocurrencies over the years, but change could be on the horizon.

In March the FCA announced that it had launched a cryptocurrency task force in association with the Bank of England in order to explore ways to regulate and foster the expanding cryptocurrency sector.

The FCA has since confirmed that it will deliver an analytical report on the state of cryptocurrencies later this year and has already delivered a guideline document for financial institutions looking to launch cryptocurrency derivative offerings.

MIT Professor of Economics John van Reenen told Cointelegraph that it seemed unlikely that these financial giants would change their tune towards cryptocurrencies, but these latest moves by the British financial regulator suggest that may not be true.

In a similar vein, the FCA has noted the appetite for financial offerings like derivatives for the cryptocurrency markets in the UK. They've reacted by providing a clear-cut message to companies launching these type of financial instruments.

While there are no regulations for cryptocurrencies in the UK at present, the FCA has made it clear that firms looking to offer futures, contracts for differences and cryptocurrencies options must adhere to existing regulations set out by the British financial regulator.

Cryptocurrency futures - a derivative contract in which each party agrees to exchange cryptocurrency at a future date and at a price agreed by both parties.

Cryptocurrency contracts for differences - a cash-settled derivative contract in which the parties to the contract seek to secure a profit or avoid a loss by agreeing to exchange the difference in price between the value of the cryptocurrency CFD contract at its outset and at its termination.

If the prevailing rhetoric from British banks and financial institutions is anything to go by, the FCA could produce a report that continues to keep cryptocurrencies at an arms length.

"First, because of the sheer numbers of people it will directly affect. There's been incredible growth of the cryptocurrency market in recent years. This growth can be expected to soar further and quicker over the next decade as more and more investors pile into the likes of Bitcoin, Ethereum, Ripple, Litecoin and Dash, and as adoption by businesses and organisations further increases."

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