The Financial Conduct Authority (FCA) – the top monetary regulator in the United Kingdom – proposed to tighten the rules on how high-risk investments such as digital assets are advertised. The watchdog said companies should not be able to promote cryptocurrencies to people who lack financial knowledge and experience.
The UK Strengthens its Stance
The FCA and the government of the United Kingdom do not rank as the most crypto-friendly institutions as they have been trying to restrict the general public from delving into the digital asset space for a while now.
Yesterday (January 18), the chancellor of the Exchequer – Rishi Sunak – proposed a law according to which crypto ads will have similar standards to other financial instruments like stocks and shares. Specifically, promoting digital assets will only be allowed if the investment details are clear and not misleading.
In a January 19 report, the FCA announced it is willing to strengthen those rules. The agency thinks only individuals with sufficient financial knowledge and experience should enter the digital asset market. The watchdog believes dealing with bitcoin “can bring novel risks of harm for consumers and markets,” and appropriate rules should apply for the entire industry:
“We are therefore proposing to apply the same financial promotion rules to cryptoassets as we are proposing to apply to other high‑risk investments.”
Unlike its previous harsh viewpoints on cryptocurrencies, this time, the FCA recognized some of their merits. The agency noted that the digital asset industry is rapidly growing and that millions of British investors have entered the ecosystem.
Bitcoin and the altcoins have the ability to increase the efficiency of the monetary system, enable faster settlements, and help better monitor transactions, the regulator claimed. In addition, stablecoins could also be beneficial for the macroeconomic network, as well as for consumers and businesses.
Crypto Becomes More Popular Among Locals
Despite being one of the countries with the toughest cryptocurrency regulations, digital assets are a highly attractive investment tool for UK residents.
Last year, the FCA revealed that 78% of locals have heard of bitcoin or some altcoins, while more than 2 million are holders.
Shortly after, a Coinbase research informed that more than 50% of the surveyed British adults are “very interested” in taking out a loan using digital asset holdings as a guarantee instead of traditional methods. At the same time, 39% said they want to use cryptocurrencies to transfer money abroad and receive funds from relatives who do not reside in the UK.