UK Will Recognize Crypto as a Legit Financial Instrument, Updating Its Ancient Laws

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We all know that cryptocurrencies, more specifically Bitcoin, are hated by banks and most governments. Some smaller countries such as El Salvador are reaping the benefits of a decentralized payment system, but the big players are almost always against crypto. The United Kingdom, for example, was not that interested in updating its ancient laws and financial instruments to accommodate crypto investors and owners. But, that’s about to change soon.

The UK is going through some turbulent times on the political stage. There have been two PMs in the past two months, and Brexit—for now—didn’t have the positive effect many politicians believed in. But, it seems that the wind is blowing in the right direction at least for crypto, with the new Financial Services and Markets Bill extending payment rules to stablecoins.

Additionally, the lower house of the Parliament has just voted in favor of adding cryptos to the scope of activities that will be regulated by the new bill.

Putting the Law Commission to Work

Legislators that put any kind of laws in place don’t always have the expertise to draft legislation. For that matter, new independent bodies are formed that will push forward the laws to study the important points. That’s what happened with the Law Commission for England and Wales, which is made of lawyers, high court judges, and professors of law. This Commission is funded by the UK Ministry of Justice, and has the goal to update the UK’s ancient laws for the imminent arrival of cryptocurrencies.

The Law Commission has so far been focused on running various projects focused on the crypto space. It’s looking to determine how Web3 development projects such as DAO and digital assets will work under new or existing laws. This makes the work of this department very important as the UK seems set to turn the country into a global crypto hub. New Prime Minister Rishi Sunak has already proposed a CBDC which was unofficially dubbed Britcoin back when he was a Chancellor of the Exchequer in 2021.

The Local Crypto Industry Welcomes Rishi Sunak

The new prime minister is obviously a big fan of cryptocurrencies. His new government is set to make the all-important leap to recognizing cryptocurrencies as legal financial instruments. That will happen sooner rather than later, as the Financial Services and Markets Bill goes into effect. It was focused on stablecoins when it was first drafted, but the lower Parliament house has voted in favor of adding cryptocurrencies to the list.

The so-called crypto provision part of the newly-drafted law will define what a crypto asset is. Under clause 14, it clarifies that crypto assets can be brought into scope of existing provisions. In short, they will become a legal financial instrument under the guide of the Treasury. The Treasury itself will consult industry experts and stakeholders going ahead, ensuring that the framework reflects all the benefits and disadvantages of crypto activities.

Good times are coming for UK crypto holders, and we hope others to follow.

October 26, 2022: • No Comments

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