The Financial Services and Markets Bill has successfully passed through the United Kingdom’s House of Lords, marking a significant milestone in the country’s endeavor to regulate crypto-assets and their providers.
Initially introduced on July 20, 2022, this legislation has the potential to have a substantial impact on the cryptocurrency markets. With the endorsement from the House of Lords, the bill is now one step closer to becoming law. Originally designed to leverage post-Brexit opportunities and empower financial regulators, the FSMB initially included a provision for regulating stablecoins under national payment rules. However, as the bill progressed through Parliament, amendments were incorporated to treat all cryptocurrencies as regulated activities, alongside measures for overseeing crypto promotions.
The bill, which follows the Government’s “Future Regulatory Framework” review, is considered a comprehensive agenda for significant transformations in the financial services sector. It aims to repeal and replace all laws and regulatory requirements stemming from EU measures in the aftermath of Brexit.
One of the key aspects of this legislation that is of particular interest to the cryptocurrency sector is its provision for regulating crypto-assets and their providers. This represents a groundbreaking development in UK law and demonstrates a sincere effort to introduce regulatory oversight into an industry known for its laissez-faire approach. The intention behind these measures is to bring about greater transparency and stability in the often volatile cryptocurrency markets. Additionally, the bill seeks to regulate ‘Buy Now Pay Later’ products and their providers, with the goal of enhancing consumer protection. At the same time, it ensures the continued availability of cash, which remains vital for demographics that still rely on physical currency.
Furthermore, the bill introduces the possibility of mandatory reimbursement for victims of Authorised Push Payment (APP) scams. APP scams have been a prevalent issue in the UK, and the bill aims to impose stricter controls on individuals approving financial promotions for others, thereby increasing accountability within the financial ecosystem. As the bill progresses through the parliamentary process, several consultations on its provisions are currently underway. Certain aspects are expected to ignite intense debates, while other provisions are likely to be promptly integrated into the regulatory system.