The Financial Conduct Authority (FCA) would have the power to regulate all crypto-assets under proposals drawn up by the Treasury.
The UK government has expanded the reach of its planned crypto-asset framework.
Although the original plan had been to give the FCA powers to regulate specifically stablecoins, the government has now pivoted, introducing an amendment that also accounts for other types of crypto-assets, including Bitcoin.
“This new clause amends the Financial Services and Markets Act 2000 to clarify that the powers relating to financial promotion and regulated activities can be relied on to regulate crypto-assets and activities relating to crypto-assets”, states the new amendment, laid down by government minister Andrew Griffith.
“Crypto-asset is also defined, with a power to amend the definition.”
The law is likely to pass, considering the opposition Labour Party has previously said that it is not opposed to the financial services reforms.
In fact, Labour is likely to be more supportive with this latest amendment. Earlier this year, shadow treasury minister Tulip Siddiq called for the government to end the "wild west" approach to crypto.
Griffith was re-appointed as the minister responsible for financial services on Tuesday (October 25), following the election of Rishi Sunak as the new leader of the Conservative Party, and therefore the Prime Minister.
His intervention comes at the same time as the Bank of England’s (BoE) deputy governor, Sam Woods, said the central bank is moving forward to create a regulatory framework for systemic stablecoins.
According to the official, this will allow both non-banks and BoE-regulated banks to innovate, and a public consultation paper on the new regime will be published next year, Woods said.
Griffith’s boss is his predecessor, John Glen, who resigned over the summer.
Glen, a close ally of Sunak, has now been promoted to the position of chief secretary to the Treasury.
During his tenure in the Johnson government, Glen was a key architect of the government’s crypto strategy, telling a conference in April that “as crypto-technologies grow and become more interconnected with the core financial system, we’ll need to ensure that regulators have the right tools to manage the associated risks”.
Glen also spearheaded the government’s access to cash work, stating that it is vital for many citizens, tweeting that “protecting access to cash for people who rely on it is one of my top priorities”.
Glen is joined in Cabinet by Mel Stride, the new work and pensions secretary. Up until recently, Stride had been leading an influential Treasury Select Committee, which scrutinises government and regulatory work regarding the economy and financial services.
Until his appointment, he had chaired the committee’s probe into the work of the Payment Systems Regulator (PSR), and scrutinised the decision by Mastercard and Visa to hike cross-border card fees between the EU and UK.
He also led on work critiquing the government and regulator’s approach to fraud, spurring a reaction from the government as well as the PSR, which has now expanded the scope of the Confirmation of Payee rules.
Meanwhile, Kevin Hollinrake has been appointed to the government’s business department.
Payments sources have previously told VIXIO that he is one of the more clued up parliamentarians when it comes to payment systems and he is said to be unimpressed by the scheme fees charged by Visa and Mastercard.