Foreign media: Isadora Arredondo, who was involved in policy work with the British Financial Conduct Regulatory Authority (FCA), argues that the UK’s desire to build a “encryptic centre” is slow, not just because of regulatory hostility, but because of a clear gap between policy objectives and actual implementation.
In an interview with CoinDesk, she stated that British regulation had developed in recent years along two parallel lines: one for institutions and wholesale markets, moving faster, and the other for start-ups and retailing, with a longer approval process and greater reliance on the original regulatory framework.
Control focus multiple transitions
Arredondo argues that it is necessary to look back at several rounds of pressure faced by the FCA between 2018 and 2021 to understand the slow pace of progress in Britain. The first is the graduation, where regulators need to rewrite a large number of post-European Union rules. This was followed by an outbreak, with a shift in the regulatory focus towards loans, bank response and relief arrangements.
She said that after the epidemic, the FCA had to deal with a number of high-profile investment failures, including the follow-up effects of London Capital & Finance and Woodford Fund. These events have further reinforced regulatory concerns about consumer protection, and encryption is increasingly being looked at in this framework.
Institutional drive faster.
In her view, British involvement in digital assets was not conservative. FCA has promoted projects such as digital securities sandboxes and also maintains cooperation with financial institutions that explore monetization and digital assets. In her view, this suggests that the regulatory level is relatively active in the wholesale and institutional landscape and is willing to participate directly in the pilot.
However, the situation is different for smaller encryption enterprises. Unlike the EU MiCA, which establishes separate rules for encryption operations, the United Kingdom is more involved in the integration of related activities into the existing regulatory system. She stated that this would expose start-up companies to longer authorization cycles and repeated reviews from different teams.
The article mentions that the British Central Bank has recently adjusted its approach to stable currency regulation. The Central Bank did not continue to advance its previous concept of quotas for the holding of French currency by individuals and businesses, moving to a total-level temporary issuance bar with a maximum circulation of Pound40 billion for a single systematic stabilization currency.
The next phase of interoperability.
Arredondo is currently responsible for global policy in Hedera. In her view, the focus of the next phase of the digital currency was not just to continue to introduce new chains, stable currencies or central bank digital currencies, but to enable these systems to work together.
She indicated that the industry had, over the past few years, built its own block-chain networks, stabilization currency and digital currency projects, but had not invested enough in harmonizing standards and interoperability. This problem is becoming more acute as Governments, banks and businesses simultaneously experiment with tokenized deposits, stable currencies and central bank digital currencies.
She also mentioned that the EU was trying to co-exist stable currencies, token bank deposits and central bank currencies within the same broad framework. In her judgement, such a compatible approach might make it easier to form a digital monetary system available than to move forward independently.
Wall Street's entry is not a departure.
There have been persistent differences within the industry regarding the accelerated access of large banks, regulators and financial institutions to the encryption market. Some early supporters argued that this meant that the encryption industry was moving away from the original objectives of decentrization and de-intermediation.
But Arredondo believes that institutionalization does not mean that early ideas fail. Her view was that some of the earliest monetary and financial issues raised by the encryption industry were being absorbed by the mainstream financial system. In her view, it was more like the idea of encryption entering traditional finance than being replaced by the latter.