The massive adoption and surge of cryptocurrencies last year raised regulatory concerns for governments and regulators in various countries.
Since then, crypto enthusiasts have predicted 2022 to be a year the industry witnesses massive regulatory policies and clampdown from various governments.
So far so good, the predictions have been right with several governments evaluating various regulatory policies concerning cryptocurrencies. If you want to start bitcoin trading Join 1K Daily Profit Today.
The UK government is not left out in this. Its regulators as well as the Treasury and Bank of England now push to regulate NFTs and crypto assets in 2002.
NFTs and cryptocurrencies did catch public interest last year — major spot clubs issued fan tokens and several enthusiasts have invested hugely into decentralized finance (DeFi).
This increased participation in the crypto industry has prompted rising concerns amongst UK regulators. To this end, many now call for more oversight and regulation of the industry citing concerns of zero consumer protections.
In reaction to this, several new insurance policies have been proposed to keep various crypto markets under the rule of regulation.
However, as the UK government continues to make new regulatory proposals, a request strikes as very unusual.
The UK jas requested the removal of Distributed Ledger Technology (DLT) and blockchain references from crypto definitions
Removal of blockchain reference from the crypto definition
According to the latest report from the Her Majesty’s (HM) Treasury, there is a claim to exempt blockchain and DLT references when defining crypto belongings.
The report acknowledges that while most digital assets use blockchain and DLT as a fundamental technology, that will change over time as the industry evolves.
The official statement claimed that most crypto assets currently make use of distributed ledger technology (DLT) but that could change.
The crypto space is known for its rapid evolution in technology and ideology, hence, the changes are very possible.
As a result, the government is proposing the removal of DLT references when defining various crypto assets.
Asides from this controversial definition of digital assets change, the HM Treasury paper also made mention of regulating decentralized finance (DeFi).
The idea is to bring decentralized finance (DeFi) under regulatory breath on a case-to-case rationale. This way, the government will be able to monitor and regulate the rapidly growing industry.
The actions promoted or carried out determine whether decentralized finance platforms or crypto assets lending actions are encompassed within the scope of the administration. Hence, the case-to-case basis is the best rationale for the regulatory foundation
A lot of crypto supporters believe removing the DLT and blockchain reference as suggested by the committee is a bad move.
Many believe such a move could be a threat to the decentralized nature of the crypto space. For instance, the Chinese digital yuan or CBDC e-CNY is asserted to be established in blockchain technology but that la, not the case.
Instead, it’s nothing less than a private blockchain that is centralized and regulated by the government. This proposal from the British government is an indication that the UK government wants to follow a similar path.
Regulation of crypto Adverts
As an effort and giant leap towards regulation, the UK government is also embarking on regulating crypto advertisement.
The government is looking to tackle more tightly crypto adverts, as it considers many misleading promotions.
This decision was made after London recorded an increase in the number of crypto-related ads in the past months.
This proposal was announced on Tuesday by the UK government via its official website. The plan is to establish regulations to address deceiving the general public via crypto promotions.
The UK government is also proposing to subject crypto promotions to similar rules that apply to other financial adverts. The government claims this is all in a bid to make sure the ads are clear and fair.
Rishi Sunak, the British finance minister asserts that undoubtedly, crypto-assets can offer thrilling opportunities, providing investors a new way to invest and transact. However, he believes consumers are not to be deceived with misleading claims just to sell a product.
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