UK’s Financial Conduct Authority Confirms that Crypto Derivatives Is a Step towards Its Recognition
There is every possibility that the United Kingdom is moving towards recognizing the cryptocurrencies in the country. This is quite evident from various developments that are taking place in the recent past. The latest one is that the Financial Conduct Authority (FCA) has accorded approval for crypto derivatives. Significantly, the latest move comes after the regulator launched a task force in alliance with the Bank of England. That was not only to explore regulating ways but also foster the expanding digital coin sector.
Though it could be termed as small steps that the FCA has been taking, there is also no doubt that it would have its impact on further regulations. The regulator specified that cryptocurrency derivatives could be described as financial instruments. This came under the purview of ‘markets in Financial Instruments Directive II.’ It required any enterprises involved in regulated derivative-based activities to meet the terms of the Handbook rules of the FCA. Aside from that, it should also comply with European Union’s applicable provisions.
According to a report in coingeek, the regulator stated that any company “dealing in, arranging transactions in, advising on or providing other services that amount to regulated activities in relation to derivatives that reference either cryptocurrencies or tokens issued through an initial coin offering (ICO), will require authorization by the FCA.” Incidentally, there are doubts expressed in some quarters about FCA’s scope on digital currencies. None-the-less, the move indicated that it is moving towards pro-stance towards the sector.
The regulator would seek some of the types of transaction to conform to its guidelines or regulations. This included cryptocurrency contracts or digital currency futures for differences, as well as, options. The handbook of the FCA offered necessary information for enterprises to conclude if their products have met the policies of the regulator. The United Kingdom thinks that the year 2018 belongs to digital currencies as the interest for it is increasing. As a result, regulations to are getting tightened.
Last month, the FCA aligned with Bank of England to take stock of the cryptocurrency market and engaged in the process of how to control it. As part of it, the task force is entrusted with a task of releasing its analytical report later this year on the growing virtual currencies market. Economics Professor at MIT, John Van Reenen, believes that the country would likely take a favorable stance on digital currencies market. However, he sees a different kind of story from the recent measures.
For quite some time, a number of analysts believe that Britain could be an attractive location for not only blockchain startups but also fintech firms. That is primarily due to the positivity demonstrated by the FCA. The country is trying to be at least one step ahead of the rest of world, which is slowly embracing the new age currencies.
The nation is also pushed to the wall to create a favorable atmosphere for cryptocurrency market to stay ahead of the European Union. In the absence of it, the country would lose a competitive edge. Significantly, other countries in the region to are showing interest.