UK & EU Regulation Divergence Post-Brexit
Carl Fernandes
20 years: Financial services law & regulation
In the previous video, Carl looked at the impact of Brexit on financial services and the UK’s plans for developing its regulatory policy outside the EU. In this video, he discusses other areas of future policy development, such as the regulation of crypto-assets.
In the previous video, Carl looked at the impact of Brexit on financial services and the UK’s plans for developing its regulatory policy outside the EU. In this video, he discusses other areas of future policy development, such as the regulation of crypto-assets.
UK & EU Regulation Divergence Post-Brexit
4 mins 49 secs
As the EU and UK regimes continue to diverge, we can expect the UK to use international standards rather than EU regulation as a guide for its future policy work. This can be clearly seen in the approach to regulating crypto-assets where the EU is creating a framework similar to the MiFID framework, whereas the UK is taking cues from international bodies.
Key learning objectives:
Understand that EU and UK regulation will diverge
Outline how the approach to regulating crypto-assets has varied between the EU and UK
How is the EU approaching crypto-asset regulation?
The EU is negotiating a new form of regulation on markets in crypto-assets known as MiCAR, which is often described as MiFID for crypto-assets. It includes restrictions on crypto-asset issuance, authorisation approvals for crypto-asset service providers from member states, organisational requirements, prudential safeguards and conduct of business requirements. It also envisages a market abuse regime. As none of this had been decided or agreed at the end of the Brexit transition period, it was not onshored.
How is the UK approaching crypto-asset regulation?
The UK is taking cues from international bodies in what it has described as a ‘staged and appropriate’ approach to regulating crypto-assets.
Regarding stablecoins, the UK has sought to reflect recommendations from the FSB and IOSCO. Stablecoins that are used as a means of payment will be regulated as a form of electronic money and regulated by the FCA and systemically important stable coins will be regulated by the Bank of England.
The UK has also stated that it is waiting for the Basel Committee to propose an internationally-agreed position on how crypto-assets should be treated for prudential purposes.
The UK has also said it plans on implementing FATF’s recommendation on imposing a travel rule on crypto-asset transfers. Meaning information on the originator and beneficiary will accompany transfers of crypto-assets.
Carl Fernandes
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