UK's Financial Services and Markets Bill Should be Passed by Spring 2023, Treasury Says
The U.K.'s wide-ranging Financial Services and Markets Bill (FSMB), which could give regulators more power over crypto, should be passed into law by next spring, a spokesperson from the Treasury told CoinDesk in a statement.
The FSMB has already been debated in the House of Commons and is set to have its second reading in Parliament's upper house, the House of Lords, by Jan. 10. It will be sent back to the House of Commons after that, where any amendments from the House of Lords will be considered. (and possibly sent back and forth if there are any disagreements). When both houses agree the bill will be sent to King Charles III where it can be made an Act before taking effect.
“This is of course an important milestone and will enable us to make substantial progress on the provisions within the Bill, including repealing and replacing burdensome pages of retained EU (European Union) law governing the sector, measures to embrace crypto asset technology, and measures to protect the consumer," a Treasury spokesperson told CoinDesk in an emailed statement.
The FSMB is crucial because it will make way for crypto to be regulated in the U.K., something that regulators have increasingly called for since the collapse of what was once the fourth largest exchange, FTX. Plus, the country wants to be a crypto hub and has some catching up to do with the EU, which has finalized a crypto rule book in its Markets in Crypto Assets regulation.
If the FSMB is passed as is, it will ensure crypto is treated as a regulated activity and give the Financial Conduct Authority (FCA) and Payments Systems Regulator power to regulate the sector and protect consumers. Currently, the FCA only has power to ensure crypto companies register with it and comply with its anti-money laundering rules. An amendment was recently approved that will enable the FCA to regulate crypto under the existing promotions rules, which could make it near impossible for crypto firms to advertise to U.K. clients.
It is possible that the bill could end up being passed outside of the Treasury’s expected time frame. No Parliament sites have listed a timeline for the bill's passage yet.
The bill could give the Bank of England the country’s central bank power to regulate systemic crypto used for payments and stablecoins which are crypto pegged to another asset like fiat currency.
The Treasury is looking to release a consultation on how it will regulate crypto in the coming weeks.