Addressing the audience at the Regulation of Cryptocurrencies event in London, Executive Director of Strategy and Competition at FCA or Financial Conduct Authority, Mr Christopher Woolard outlined significant risks about crypto assets and identified the different options for tackling the same.
He said, after a significant increase in adoption recently, the Taskforce brought together the FCA and HMT (Her Majesty’s Treasury), the Bank of England, to discover the effect of DLT or Distributed Ledger Technology along with crypto assets on different financial services. Considering the potential risks that crypto assets might pose “to market veracity, to consumers and the chances of financial crime” Christopher said:
“The HM Treasury, the Bank of England and the FCA are all taking significant steps towards addressing these risks and encouraging beneficial innovation shortly.”
Advantages and Risks
Moreover, Woolard stated that it is quite likely that consumers and businesses in the UK will make the increased usage of crypto assets. Further adding to his statement, he said that there are a great many advantages that can be fetched out of this. However, there are even some risks involved at the same time. He further came up with a strategy on the right procedure of handling the risks and minimising harm to the consumers. Tackling these potential risks involves adhering to domestic regulations and international cooperation, Woolard stated.
The Executive Director further noted that there is a significant advantage that can be derived from crypto assets. The advantage can be obtained by making already existing procedures such as debt instruments issuance and foreign money remittance easier and cheaper. He further added that even though he along with the FCA do not consider crypto assets to be a considerable risk, it is always wise to be careful.
FCA’s plan of action
Woolard stated that the plan of action that comes from the Financial Conduct Authority is finding the tokens that come under their administrative boundary. Her Majesty’s Treasury will further check if a specific extension of the regulations is essential for encapsulating crypto assets along with features perfectly comparable to securities.