Crypto Sector Praises ‘Seismic Shift’ in UK Regulations

The U.K. cryptocurrency industry is praising an update to the country’s digital asset regulations.

As the Financial Times (FT) reported Thursday (Aug. 7), this follows a decision last week by the Financial Conduct Authority (FCA) to end its ban on offering crypto exchange traded products to retail investors.

The industry has likened it to the so-called “Big Bang” regulatory rollbacks that happened in 1986, the report added.

“This is extremely significant and in some ways it could be seen as the first step in a seismic shift in UK financial markets in terms of the acceptance and adoption of digital assets more generally,” said Russell Barlow, CEO of 21Shares, which issues cryptocurrency exchange traded products.

“It’s perhaps as important as the Big Bang in 1986. That was an attempt to modernise the City of London and make the UK globally competitive,” he added.

Dovile Silenskyte, director of digital assets research at WisdomTree, added that the lifting of the U.K.’s retail ban “marks a pivotal moment in the broader integration of digital assets into the financial system.”

According to the report, the FCA’s decision means that, starting Oct. 8, retail investors in Great Britain will be able to purchase bitcoin or ether using regulated, exchange listed products, rather than through crypto exchanges, which are not recognized by the watchdog.

Exchange traded notes (ETNs), the report notes, track an underlying index and are traded and listed on an exchange, much like exchange traded funds (ETFs).

The FT also points out that the FCA has a long history of taking a hardline position against crypto investment, in an effort to protect against fraud and volatility. Last year it allowed crypto ETNs to list on the London Stock Exchange, but limited participation to institutional investors.

In other crypto regulation news, PYMNTS wrote earlier this week about efforts by the U.S. Securities and Exchange Commission (SEC) to streamline the integration of digital assets products into traditional financial ecosystems.

This includes “Project Crypto,” an SEC-wide initiative to modernize securities rules and regulations. This includes interim guidelines suggesting that USD-pegged stablecoins could be considered as cash equivalents, provided they have guaranteed redemption mechanisms.

“By delineating a narrow set of compliance criteria for ‘Covered Stablecoins,’ the SEC has effectively opened the door for these digital assets to function as regulated, fiat-linked payment instruments,” PYMNTS wrote. “The path forward may be conditional and constrained — but for the first time in U.S. commerce, it is potentially navigable.”