A new amendment to the Financial Services and Markets Bill could regulate crypto assets like Bitcoin alongside stablecoins.
Lawmakers in the House of Commons voted in favor of a proposal by parliament member Andrew Griffith to bring crypto under the banner of regulated financial services.
FSM Bill would place crypto under existing Act
The proposal was part of a list of amendments to the original bill that would make stablecoins regulated payment forms. The proposal brings crypto under the Financial Services and Markets Act 2000 framework. It allows ads to be regulated and unauthorized companies to be given the boot.
“The substance here is to treat them [crypto] like other forms of financial assets and not to prefer them, but also to bring them within the scope of regulation for the first time,” said Griffith.
The bill was introduced while Rishi Sunak was the Chancellor of the Exchequer. So far, the lawmakers have debated the bill in two sittings on Oct. 19, 2022, and one on Oct. 25, 2022. Before being passed into law, the bill must go through the House of Lords and be subject to one more review, after which it can be signed into law by His Majesty King Charles III.
In similar news, South Africa’s Financial Sector Conduct Authority announced on Oct. 19, 2022, that it would recognize crypto as a financial product with immediate effect.
Will Bitcoin need to be a hedge with new PM?
The news of the possible regulation of crypto comes soon after a spike in sterling transaction volume on crypto exchanges. After former British Prime Minister Liz Truss introduced unfunded tax cuts on Sep. 23, 2022, Britons flooded exchanges to buy Bitcoin with sterling, causing transaction volume to spike 233% compared to Aug. 2022. The spike came with the pound struggling against major global currencies like the U.S. dollar.
Advocates early on touted Bitcoin as a hedge against inflation because the currency is issued on a fixed schedule with a maximum supply of 21 million. But its correlation with equities earlier this year has weakened that argument. Furthermore, the recent appointment of Rishi Sunak as the new U.K. Prime Minister could mean more conservative fiscal policies for the U.K. in the near future, meaning stability for the pound. Sunak opposed Truss’s unfunded tax cut policies. The failure of the economic policy vindicated Sunak when it proved disastrous for the U.K. economy. After he became Prime Minister, Sunak promised “integrity, professionalism, and accountability at every level of the government I lead.”
