Here’s How the UK Plans to Close the Regulatory Vacuum in Crypto

The UK is gearing up to close the regulatory vacuum present in the crypto market.

As such, the Bank of England’s Financial Policy Committee highlighted the need for enhanced regulatory and law enforcement frameworks in the sector.

In their latest report, the committee said that while the growth of crypto-assets and their associated markets and services do not pose an immediate threat to the UK financial system,

Cryptoasset valuations have fallen sharply. The market capitalization of crypto assets has fallen to US$900 billion, from a peak of almost $3 trillion in late 2021.

The recent events in the crypto market, such as the liquidity crisis and leveraged positions being unwound, have amplified price falls.

Stablecoin is one of the hot-button issues in the crypto market that the regulators are keen on establishing important provisions.

UK’s top regulator – Financial Conduct Authority – said it will investigate Terra’s collapse while developing new rules for the asset class.

UK Chancellor and one of the senior-most Cabinet ministers, Rishi Sunak, wants Britain to be a “global hub” for crypto.

According to some estimations, Sunak is among the favorites to be the next Prime Minister, which could further alter the local crypto ecosystema.

The UK government has called for public input on the taxation of crypto-asset loans and staking from decentralized finance (DeFi) participants.