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UK plans to regulate crypto sector like mainstream financial services

UK plans to regulate crypto sector like mainstream financial services

The UK government plans to bring the cryptocurrency sector under the regulation of mainstream financial services. The Treasury stated on Tuesday, January 31, that it would announce proposals to regulate a broad range of crypto-asset activities in line with traditional finance.

The move has been welcomed by the CEO of one of the world’s largest asset managers, Nigel Green of deVere Group. Green highlighted the significance of regulation in the future of digital finance, stating that a strong regulatory framework will protect investors, tackle criminality, and reduce the risk of disrupting financial stability, according to a press release shared with Finbold on February 1.

“The news that digital currencies are being brought into the regulatory tent in one of the world’s largest economies and most highly-regulated markets shows that crypto is now mainstream. It has come of age. A strong regulatory framework will help protect investors, tackle criminality, and reduce the potential possibility of disrupting financial stability.”

In addition to protecting investors, Green believes that the regulation will position Britain as a global hub for cryptocurrency and fintech, attracting businesses and creating jobs.

He notes that this will further increase the confidence of businesses to think and invest long-term.

“This move will help further position Britain as a global hub for crypto, and fintech more generally. It will help attract the businesses of tomorrow – and the jobs they create – in the UK, as effective regulation gives them the confidence they need to think and invest long-term.”

UK government expresses interest in CBDC

The government has also expressed interest in launching its own central bank-backed digital currency (CBDC), which Green believes will further bolster the case for cryptocurrencies.

According to a study by deVere Group, 82% of high net-worth clients with £1 million to £5 million in investable assets sought advice on cryptocurrencies. Green stated that this momentum of interest is likely to build further as the bear market, or ‘crypto winter’ of 2022, is thawing. He notes that the recent positive performance of cryptocurrencies, including a 40% increase in the value of Bitcoin since the turn of the year, will not go unnoticed by investors.

The CEO said the move to regulate cryptocurrencies highlights the growing awareness of the digital currency’s core values, including being digital, global, borderless, decentralized, and tamper-proof. He concluded that regulation would further strengthen the crypto sector and instill trust and confidence in investors, which will have a positive impact on prices in the long term.

All in all, the UK government’s decision to regulate the cryptocurrency industry is a significant step towards mainstream acceptance and a strong regulatory framework. The move is expected to benefit both investors and the UK economy, positioning the country as a global hub for cryptocurrency and fintech.

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