The chancellor of the Exchequer, Rishi Sunak, believes cryptocurrencies have the capacity to provide exciting new opportunities for residents in the United Kingdom. However, some misleading advertisements might be obstacles.
Crypto Offers New Opportunities
According to Sunak, cryptocurrencies offer people new ways to transact and profit through investments in the relatively new asset class.
The chancellor noted that the UK government is willing to support the growth of such assets within its jurisdiction. This is because it has identified the benefits associated with stablecoins, especially the potential of providing an efficient payment means.
However, while the UK government is eager to support the growth of digital assets, it is committed to protecting residents from misleading advertisements that may lead to major losses.
“Cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest – but it’s important that consumers are not being sold products with misleading claims. We are ensuring consumers are protected, while also supporting innovation in the crypto asset market,” Sunak said.
The Guardian reported earlier this month that crypto firms bombarded UK public transport with a series of adverts in 2021. This fueled calls that such advertisements should be banned to protect people from venturing into risky investments.
Between April and September 2021 alone, the Guardian noted that a total of 39,560 adverts were on display across Transport for London (TFL) services.
Regulating Crypto Ads in the UK
Following the rise in misleading crypto-related ads, the UK government proposed a new law that will oblige such firms to subject their ads to Financial Conduct Authority (FCA) rules instead of an outright ban, as earlier reported.
Based on this, the regulator will amend the Financial Promotion Order through secondary legislation to include cryptocurrencies.
Once the law is amended, ads relating to digital assets will have similar standards to other financial instruments such as stocks and shares, the coverage added.
Citing the Financial Services and Markets act 2000 that forbids businesses from promoting financial instruments unless permitted to do so, the report noted that cryptocurrency-related ads will only be allowed if the investment details are clear, fair, and not misleading.
Furthermore, the government plans to put a transitional period of six months for the finalization and publication of the proposed Financial Promotion Order regime and the complementary FCA rules.
Per the report, it is imperative to strengthen the rules governing promotions for the asset class in the United Kingdom because people, who have shown interest in owning cryptocurrencies, might not have a clear understanding of digital currencies.