 The Cryptoassets Market in the United Kingdom: Regulatory and Legal ChallengesMalgorzata Sulimierska () and
Agnieszka Sikorska
Chapter Chapter 9 in The Fintech Disruption, 2023, pp 215-242 from Palgrave Macmillan Abstract: Abstract The recent event related to the war in Ukraine has further sparked interest in cryptocurrencies and raised questions about their regulatory oversight. In November 2021, the cryptocurrency market capitalization reached a staggering US$3 trillion, which included more than 8,000 cryptocurrencies, and it is one of the most dynamic markets in the world (Crypto Market Sizing Report, 2022). There is significant exposure of the cryptocurrency ecosystem via a multitude of direct and indirect interlinkages into the banking sector. These include activities such as direct issuance and ownership of cryptocurrencies, intermediation services for customers, clearing of contracts that reference cryptocurrencies, or services for cryptocurrency issuers such as underwriting initial coin offerings or stablecoins. However, since 10 January 2020, all existing businesses carrying on cryptocurrency operations in the United Kingdom (UK) must be compliant with the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2017 and be registered with the Financial Conduct Authority (FCA) in order to be able to in the business. This change of the rules had a significant impact on the cryptocurrency ecosystem and its effect on the banking industry. The FCA also reported that around £60 million was lost due to social media investment scams in 2020. This leads to the main discussion of this chapter—what is the appropriate level of regulations in the market in the context of the UK as a comparison to recent EU regulatory development? Also, how does the existing regulation impact the real-world cases from the UK banking industry and if there is any possible solution for crypto-risk and how it can be avoided? Keywords: Cryptocurrencies; Decentralized finance; Digital currencies; Financial regulation; Financial supervision; Exchange; Stablecoin; Bitcoin; Banking; UK (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:psincp:978-3-031-23069-1_9 Ordering information: This item can be ordered from DOI: 10.1007/978-3-031-23069-1_9 Access Statistics for this chapter More chapters in Palgrave Studies in Financial Services Technology from Palgrave Macmillan |
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