The first week of February marks a historic milestone for cryptocurrency legislation progress in the United Kingdom. EU policymakers designed the Markets in Crypto-Assets laws or (MICA), to be a comprehensive regulatory framework for the world to follow. The MICA bill was published by the Treasury this week and is up for final vote via the European Parliament in April 2023. This swift movement toward regulatory clarity may give the UK a considerable advantage over other potential cryptocurrency hubs around the world.
The UK's version of leading by example in cryptocurrency legislation includes a focus on crypto exchange compliance departments, risk and fraud management practices, and the acknowledgement of Financial Conduct Authority (FCA) oversight. The regulation also impacts custodial partners and brings them under the purview of the FCA. Other key regulations mimic those found in the traditional markets which guard against market manipulation and insider dealing.
This first mover advantage positioning allows the UK government to establish the regulatory tone for cryptocurrency that other administrations to follow. In fact, smaller European governments are already referencing the UK's standard, naming it the "Brussels Effect"
From our perspective, more regulatory clarity is always a good thing. It allows businesses to operate and plan more effectively in a more certain future.