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US and UK set to ‘deepen ties’ on crypto regulation, says British watchdog

United Kingdom financial regulator, the Financial Conduct Authority (FCA), has announced plans to enhance collaboration with the United States in exploring crypto regulations.

In a speech on July 14, the FCA’s CEO Nikhil Rathi confirmed talks on a possible collaboration with the U.S. are already in motion and will focus mainly on stablecoins and the exploration of central bank digital currencies (CBDC). 

The revelations come just days after the U.S. Treasury Department recommended that there is a need for cross-border partnership in establishing CBDCs. 

“We agreed to deepen ties on financial innovation after exchanging views on crypto-asset regulation and market developments <…> These conversations are vital. We are demonstrably supporting responsible use cases for the underlying technology while ensuring it is not at the expense of appropriate consumer protection or market integrity,” said Rathi. 

Involving Singapore in regulation debate 

Besides the U.S., the British regulator indicated that Singapore is also part of the alliance with the three countries unveiling the IOSCO task force on decentralized finance (Defi) and crypto market integrity risks. 

He noted that globally, there exist opportunities in the crypto sector, including the ability to promote instant cross-border payments. However, Rathi indicated that a notable pain point that needs a solution revolves around consumer protection, market integrity, data privacy, and financial crime

Despite focusing on regulating crypto, the executive maintained that the sector needs to protect innovation by making the industry a safe space. He further claimed that key industry players are also pushing for the establishment of supportive laws. 

UK’s crypto regulation progress

Furthermore, Rathi shared the UK’s progress in establishing laws to govern the crypto sector, stressing that the main focus has been the strict implementation of anti-money laundering laws. He noted that the agency is committed to working with entities that agreed to observe the rules. 

In recent months, the FCA has been aggressive in implementing crypto regulations, with the latest directive requiring operators to register their businesses afresh. Consequently, entities unable to meet the guidelines resorted to migrating abroad.

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