The Financial Conduct Authority (FCA) cryptocurrency review will be one of the most impactful regulatory reviews in modern times and will shape the burgeoning crypto market for years to come. The UK regulator’s proactive and cautious approach must be welcomed.
This observation from Nigel Green, founder and chief executive of deVere Group, one of the world’s largest independent financial services organisations, comes as the UK’s financial services and markets regulator has confirmed it will publish its review of cryptocurrencies in the third quarter this year.
Mr Green, whose firm launched deVere Crypto, a cryptocurrency exchange app earlier this year, comments: “The highly anticipated FCA cryptocurrency review is set to be one of the most impactful and far-reaching regulatory reviews in modern times for two key reasons.
“First, because of the sheer numbers of people it will directly affect. There’s been incredible growth of the cryptocurrency market in recent years. This growth can be expected to soar further and quicker over the next decade as more and more investors pile into the likes of Bitcoin, Ethereum, Ripple, Litecoin and Dash, and as adoption by businesses and organisations further increases.
“And second, because the FCA is one of the world’s most influential and respected financial regulators. As such, it can be expected to help shape and define the thinking and policies of regulators globally, the majority of which in the major economies are now also carefully looking at the crypto space.”
He continues: “In our increasingly tech-driven, digital age, cryptocurrencies are here to stay; they simply can no longer be ignored.
“Therefore, the FCA’s proactive approach towards the crypto market must be welcomed as it will help protect investors and tackle illicit activity and unscrupulous firms.
“I expect the regulator to issue warnings and this caution should also be championed as these digital assets remain highly speculative and the market relatively new.”
In its business plan for the financial year ahead, the FCA said the review was part of a taskforce with the Treasury and The Bank of England.
The watchdog noted that cryptocurrencies themselves do not fall within its regulatory remit, but “some models of use or packaging cryptocurrencies bring them within our perimeter, making the landscape complex”.
The deVere CEO concludes: “The FCA cryptocurrency review will fundamentally shape this market that now, thanks to its exponential growth, needs a robust regulatory framework.
“It is right that firms operating within the crypto sector should comply with applicable FCA rules and expect to come under the regulator’s scrutiny.”