A review of public comments revealed that the U.K. crypto stakeholders have welcomed the proposed legislation in the nation for the industry. However, they also want to work with other regulators to avoid post-Brexit isolating the U.K., especially in light of European Union Markets in Crypto Assets Regulation.

Since February, the U.K. has been advising on its proposed crypto sector strategy. The consultation period ended on April 30, with industry titans from around the world submitting their opinions.

In a CoinDesk statement, Riccardo Ricchi, Head of Policy at U.K. based the Payments Association said: “This is a positive step in the direction of establishing clarity in terms of regulation for crypto assets within the U.K ….. If these frameworks are applied thoughtfully, they will increase the adoption of innovations that benefit society, while reducing criminal and financial risk.”

The world has been trying to create rules to govern the crypto industry, and now that MiCA is in its final stages and , the pressure on countries to choose their own approach is increasing.

The U.K. is not interested in creating a new set of crypto-specific rules like MiCA. Instead, it wants to include crypto within its existing regulatory frameworks.

It is the U.K. plan to regulate cryptocurrency under the Financial Services Markets Act, and create an Authorization Regime. The country also plans to regulate stabilitycoins in accordance with the country’s rules, and to set up a regime to combat market abuse. The Financial Services and Markets Bill is currently making its way through the Parliament. It will grant regulators power to oversee cryptocurrency by extending financial instrument rules.

It’s different from MiCA. “If you compare this to MiCA where you first look at your assets and then the asset tells you whether you fall into the regulatory boundary or not, here it’s slightly different.” It is based on financial activities, which, from a regulatory perspective, I must say, is a difficult thing to handle,” said Meiran Shtibel. He’s an associate general attorney at Fireblocks, based in the U.S.

Su Carpenter, the director of operations for the group, stated in a statement to the press that the lobby group CryptoUK supported the government’s approach “same risks, same regulatory outcomes”.

Changpeng Zhao CEO of binance recently tweeted: “It solves the desired outcome instead of applying generic rules. It captures the intricacies and unique benefits/risks of novel innovation.”

Read more about the Bank of England Stablecoins Regime

Global strategy

According to the Association of Financial Markets , the U.K. cannot regulate crypto alone, after leaving the European Union by 2020, in the infamous Brexit.

Nick Taylor, Luno’s head of policy for Europe, Middle East, and Africa, said that when the U.K. constructs a market-abuse regime, it must ensure its compatibility with other jurisdictions hosting global crypto companies, and be able to work with standard-setters such as the International Organization of Securities Commissions (IOSC), Group of Seven (G7), and Group of 20. Luno is also owned by Digital Currency Group, as is CoinDesk.

CryptoUK also calls for the country’s regulators to align themselves with global regulations regarding disclosure requirements for cryptocurrency companies.

Tordera stated that it would be sensible for the regulatory system to harmonize with global regulators, as far as is reasonably possible, in order to ensure as seamless a cross-jurisdictional operating environment as possible.

Legal experts say that global crypto regulation needs coordination, not duplication.

AFME warned in its response to government proposals that the U.K.’s proposed crypto authorization regime may damage the country’s reputation as an open marketplace by making it more difficult for foreign companies to access. In its consultation, the government proposed that firms servicing U.K. customers – no matter where they are located – would be required to register with the Financial Conduct Authority in order to do business in the U.K.

The AFME does not recommend this approach, and claims that it is too different from the way financial institutions are usually regulated in the U.K. CryptoUK argued that overseas companies should be exempted from local authorisation and the government should regulate companies in the U.K.

AFME, Taylor and CryptoUK suggested a quicker process for firms already registered with the FCA. France, which is planning to implement MiCA, is considering a faster process for companies already registered with FCA. CryptoUK suggested this.

Binance’s response to the proposal stated that “it is essential that regulators adopt an urgent and proportionate approval process for complete, accurate applications and strive to avoid duplicative requests for information from businesses.”

Read more: UK Crypto Firms & Regulator Blame each other for Industry Exodus

AFME CryptoUK Binance have also requested clarification on the scope of the economic activities covered by the rules and the treatment of assets such as non-fungible Tokens. All three parties agreed that algorithmic stabilitycoins would fall under the U.K. rules. This is something that regulators have been looking at since the crash of the Terra eco-system on May 20, 2022.

The future is blurry

The U.K. Conservative government under Prime Minister Rishi Sunderak has stated that it wants the country to be a center for crypto. It may also be pushing for the finalization of relevant rules before the general elections in 2025, but might happen sooner.

CryptoUK expects that proposed stablecoin laws and rules for the wider crypto space, which the government calls the first two phases of its proposals, will be implemented by 2024.

Carpenter stated in a press release that “we suggest taking a wider view of all the enablers to help the U.K. achieve its ambition to be a global hub of the crypto-industry, including a proportionate implementation of FinProm rules [Financial Promotion] to trading venues. We also recommend addressing concerns about debanking from the crypto-industry and a progressive tax policy which addresses the nuances associated with the asset class.”

Lisa Cameron, a member of parliament from the United Kingdom’s crypto-tax framework, told CoinDesk that she had positive discussions about expanding this framework with legislators.

Read more: UK’s Crypto Future is Bright, No Matter Who is in Charge. Lawmaker Says

Sandali Handagama is the editor.