Key Takeaways
- The UK’s Financial Conduct Authority (FCA) has published a survey report as part of its roadmap for implementing a regulatory regime for the crypto industry by 2026.
- The study found that crypto adoption in the country is up 12% from 2023, with the average value of cryptocurrencies held by individuals rising from 1,595 GBP to 1,842 GBP in 12 months.
- The financial watchdog will release a research paper in early 2025 that will discuss rules surrounding the issuance and custody of fiat-pegged stablecoins, procedures to tackle abuse by market participants, and DeFi activities like lending and borrowing of crypto assets, and staking rewards.
- Regulators all over the world are looking forward to the UK and EU’s proposed rules for the crypto market, and the incoming Trump administration’s take on regulating the sector.
The United Kingdom’s financial services watchdog, the Financial Conduct Authority (FCA), has published its roadmap for implementing a wide-ranging regulatory regime for the cryptocurrency market by 2026 amid increasing digital asset ownership.
The regulator, who oversees banking and investment products in the U.K., has unveiled a timeline detailing key dates and milestones that it’s working towards for its proposed crypto regulations.
UK Financial Watchdog Study Finds 12% Increase In Crypto Ownership And 93% Rise In Market Awareness
The FCA will launch discussion papers in Q4 2024 on the rules around the issuance and custody of fiat-pegged cryptocurrencies, otherwise known as stablecoins, as well as admission and disclosure procedures and how to tackle market abuse.
In early 2025, the financial watchdog plans to launch consultation papers on crypto trading platforms, intermediation, prudential crypto exposure, and decentralized finance (DeFi) activities like staking rewards offered to users on their crypto holdings and, lending and borrowing of digital assets.
The regulator believes that a full regime governing crypto assets will go live in the U.K. by 2026, following the publication of its final policy statements.
According to the FCA’s research, crypto adoption is growing in the country, with 12% of adults owning digital currencies. The average value of a crypto token held by an individual has risen to 1,842 GBP as of August 2024, up from 1,595 GBP a year ago.
Crypto awareness is also up, from 91% to 93% in 12 months. However, there are still misconceptions about how the market is regulated, with a third of the people surveyed for the FCA research saying they could raise a complaint with the regulator if something goes wrong and they sought financial protection. Surprisingly, 10% said they do not conduct any research before investing in a cryptocurrency.
Meanwhile, advertising was moderately effective as 60% of those who saw a crypto advert said it had zero impact on them, and only 2% of respondents who had previously not considered buying a token, subsequently bought. 10% said they had already considered buying tokens before seeing an advert, while advertising discouraged 9% of those surveyed.
BTC, ETH, And DOGE Are The Most Recognized Crypto Assets In The U.K.
78% of the respondents recognized Bitcoin (BTC), the world’s largest cryptocurrency by market cap, followed by Ethereum (ETH) at 31%, and Dogecoin (DOEG) at 30%. However, only 11% recognized Solana (SOL), and Tron (TRX) was known by just 10% of those surveyed. When considering those who already hold crypto assets, ETH and DOGE closely followed BTC.
In a statement released by the agency on Tuesday, Matthew Long, director of payments and digital assets at the FCA, said their findings highlight the need for clear regulation that supports a “safe, competitive, and sustainable” crypto industry in the country.
If the FCA’s crypto policy comes into effect by 2026, the UK will become the first country in Europe to regulate the dynamic market. Despite the heavy crackdown on cryptocurrencies and their related services in the country, around 7 million individuals own some form of digital assets.
George McDonaugh, co-founder of digital asset investment firm KRI, highlighted that the increase in the number of crypto holders in the country indicates an “extremely strong” appetite for the asset class.
He highlighted that people viewing cryptocurrencies as part of a long-term investment portfolio demonstrates that the asset class is now “mainstream”. He also added that the FCA’s research revealed that crypto is widely popular with consumers and it was time for regulators and lawmakers to take action.
Global Financial Regulators Keeping Close Watch On Crypto Developments From The US, UK, and EU
Meanwhile, the crypto community is optimistic about the new regulatory regime under U.S. President-elect Donald Trump’s administration. The former president reportedly met Coinbase CEO Brian Armstrong to discuss potential crypto personnel appointments.
During his campaign, Trump promised to create a presidential advisory commission focused on crypto that will be tasked with developing transparent regulatory guidance on the sector.
Speaking to crypto news outlet PYMNTS, Nikola Plecas, the head of commercialization at Visa, said that some of the largest financial institutions in the world are eager to explore tokenized assets and are awaiting regulatory certainty to go ahead with their plans.
Meanwhile, global financial regulators are awaiting the European Union’s comprehensive regulatory framework, the Markets in Crypto-Assets Regulation (MiCA), which is expected to be implemented in the bloc by the end of the year.
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