FCA’s cryptocurrency review the most impactful of modern times

The Financial Conduct Authority (FCA) cryptocurrency review will be one of the most impactful regulatory reviews of modern times, and will determine the cryptocurrency market for years.

As such, as I was quoted as saying in International Investment, Professional Adviser, Global Banking and Finance Review, FX Empire and Investment Week, amongst others, the FCA’s proactive approach, with the review being published in the third quarter of 2018, should be welcomed.
This review will be far-reaching and the most influential in recent times, for two main reasons.

First, because of the number of people who will be directly affected. The cryptocurrency market has grown considerably in recent years. This level of growth is forecast to rocket further and more quickly over the next 10 years, as more and more investors pile into the likes of Bitcoin, Ethereum, Ripple, Litecoin and Dash, and as adoption by businesses and organisations further increases.

Second, because the FCA is one of the most influential and respected financial regulators in the world. Therefore, it can be expected to help define the thinking and policies of regulators across the globe, most of whom in the major economies are not carefully scrutinising the crypto space.

Indeed, in our tech-driven, digital age, cryptocurrencies are going nowhere. They cannot be ignored or dismissed anymore.

As such, the FCA’s initiative should be welcomed with open arms, as it will help to protect investors and combat illicit activity and unscrupulous organisations and individuals.

I fully expect the FCA to issue warnings, which should be championed as these digital assets remain highly speculative and the market relatively new.”

For the financial year ahead, the FCA said the review was part of a taskforce with the Treasury and The Bank of England.

It was noted by the financial watchdog that digital currencies themselves do not fall within its regulatory remit, but “some models of use or packaging cryptocurrencies bring them within our perimeter, making the landscape complex”.

This review will fundamentally shape the crypto market, that now, thanks to its exponential growth, needs to strong regulatory framework.

Organisations operating within the crypto sector should comply with applicable FCA rules and expect to come under the regulator’s scrutiny.

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