In response to the government’s consultation on the Future financial services regulatory regime for cryptoasset released today:
Ian Taylor, head of crypto and digital assets at KPMG UK, said: “This consultation looks set to answer many of the questions those in the crypto industry have been asking around how the trading, services, entities and investments of digital assets should be regulated. It is also a signal to the world that the UK is investing in maintaining its position as a leading financial services and innovative centre fit for the future.
“The proposals suggest that the government will be looking for the crypto industry to comply with a very similar set of regulations as the existing traditional finance industry.
“While the government is keen to be seen to promote innovation, these proposals are currently weighted heavily in terms of consumer protection and regulators will need to be mindful to not stifle innovation in this space.
“It’s clear that implementing and adhering to these proposals will require massive additional regulatory resources, or a large investment, which many crypto firms simply do not have at present. As a result, in the short term, we’re likely to see the market tighten and the overall number of firms operating in the crypto space reduce. This also poses a question about the regulator's own resources, as these new rules will demand a huge level of additional oversight and collaboration with the industry."
