The Financial Conduct Authority (FCA) – the top monetary regulator in the United Kingdom – proposed tightening 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.
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 block the general public from moving into the digital asset space for some time.
Yesterday (January 18), the Chancellor of the Exchequer – Rishi Sunak – proposed a law according to which crypto ads would have the same standards as other financial instruments such as stocks and shares. Notably, promotion of digital assets will be permitted only if the investment details are clear and not misleading.
In a January 19 report, the FCA announced it was ready to strengthen those rules. The agency believes that only individuals with sufficient financial knowledge and experience should enter the digital asset market. The watchdog believes that dealing with bitcoin “could bring new risks of loss to consumers and markets,” and that appropriate regulations should apply to the industry as a whole:
“Therefore we are proposing to apply the same financial promotion rules to cryptocurrencies as we are proposing to apply to other high-risk investments.”
Unlike its previous harsh stance on cryptocurrencies, this time around, the FCA recognized some of their strengths. The agency said the digital asset industry is growing rapidly and millions of UK investors have entered the ecosystem.
The regulator claimed that bitcoin and altcoins have the potential to increase the efficiency of the monetary system, enable faster settlement, and help better monitor transactions. Furthermore, stablecoins can be beneficial to the macroeconomic network as well as to 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 altcoin, while there are over 2 million holders.
Shortly thereafter, research by Coinbase reported that more than 50% of British adults surveyed are “very interested” in taking out loans using digital asset holdings as guarantors, rather than traditional methods. Meanwhile, 39% said they want to use cryptocurrencies to transfer money abroad and receive money from relatives who do not live in the UK.
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