The United Kingdom government has published the final recommendations for cryptocurrencies and stablecoins. The government plans to gradually implement cryptocurrency regulation by starting with fiat-backed stablecoins and then including other areas related to cryptocurrencies, i...
Specific Activities Related to Fiat-Backed Stablecoins Fall Under FCA Authority
According to the documents published by the UK government, legislation regarding fiat-backed stablecoins is planned to come into effect in early 2024. Specific activities related to fiat-backed stablecoins will fall under the authority of the Financial Conduct Authority (FCA).
The government has also released its plans for stablecoins that could have an impact on financial stability. The Bank of England initiated a consultation on a regime for algorithmic stablecoins in May.
Positive Effects of Government Cryptocurrency Regulations
Government cryptocurrency regulations have many positive effects on the cryptocurrency market. The first is legal protection. Regulations can ensure that cryptocurrencies and cryptocurrency transactions are conducted within a legal framework, protecting the rights of users and investors. This increases market credibility. Regulations can establish requirements and controls to prevent fraud and fraudulent attempts. This makes the market safer.
Alongside the positive effects of cryptocurrency regulations, overly strict regulations or overly restrictive policies can harm the cryptocurrency market. Balanced and well-designed regulations can help cryptocurrencies benefit from technological innovations while ensuring the safety of users and investors.
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