The British Financial Conduct Regulatory Authority (FCA) released an encrypted regulatory framework this week, the first concern of the outside world is not a restriction, but an attempt to retain global liquidity and keep stable currencies issued abroad in circulation. In the view of many practitioners, this idea is more open than part of European rules and more conducive to institutional entry.
Overseas platforms have access to British clients.
The Qualifying Criptoasset Trading Platform model proposed by the FCA allows overseas trading platforms to serve British clients through locally authorized branches and access established global trading infrastructure. According to industry sources, this helped to avoid the possibility of the British market being cut off into closed liquidity pools.
It's really hard to approve.
While the direction of the framework is welcome, the most important concern for enterprises is the process of delegation of authority. The FCA indicated that the overseas branches could only be granted “comparable regulatory protection” in the other jurisdiction, but that no areas that met the criteria were currently listed. Lawyers and practitioners pointed out that such uncertainty would have a direct impact on the willingness of enterprises to engage in British business.
DeFi and the Stable Currency are still pending.
Katie Harris, European Policy Leader of Coinbase, believes that the British follow-up to DeFi remains key. She noted that earlier programmes might have limited access to centralized platforms and decentralised financial applications. At the same time, the FCA has recently adjusted the stable currency rule, which is widely regarded by industry as contributing to a clearer settlement infrastructure.
Institution values legal certainty
Bailey Gifford Digital Asset Manager Sandy Jones stated that regulation per se would not make encrypted assets safer, but legal certainty, governance standards and operational resilience were the conditions required for traditional financial institutions to adopt block-chain infrastructure. The market will then see if the UK can truly translate this framework into a competitive advantage.