The UK needs to beef up its regulation of crypto for public confidence to return to the still reeling sector in the wake of the FTX collapse, Coinbase Vice President for International Policy Tom Duff Gordon said in a podcast interview.
“Certainly if you look at the UK for example, one way to restore confidence is to usher in and accelerate some basic regulatory guardrails,” Gordon said in an episode of "Following the Rules" released on Tuesday, adding that companies may need to be proactive and seek out regulation.
While regulators may not always move as fast as government wants, Coinbase has been engaging with British parliamentarians “across the political divide" through parliamentary groups on crypto and other events, Gordon said, adding that he's been speaking to the lead economic spokesman for the Labour Party, Rachel Reeves.
“I think it's important and we don't make any bets on election outcomes, but we do want to make sure that across the political divide that there is support for digital assets,” he said.
It is certainly not rare to find industry leaders in the same rooms as policymakers and regulators, especially as governments open their doors for consultations on how to best approach the nascent market. Crypto payment platform Ripple, for example, published a regulatory whitepaper for UK policymakers last month.
New laws for regulating crypto in the UK rest largely with the Financial Services and Markets Bill, which is currently in parliament discussions. While targeting the UK’s financial sector more broadly, the bill sets working definitions for crypto assets and hands the national regulator, the Financial Conduct Authority, more supervisory power.
Despite incremental build-up, some regulators and industry leaders are looking for regulation to par up to more comprehensive frameworks, like the European Union’s Markets in Crypto-Assets.
“There's an opportunity for a basic set of guardrails for crypto asset service providers where the UK takes the good bits of MiCA, which is the markets in crypto assets regulation from the EU, and builds upon those and perhaps looks to focus less on some of the parts of MiCA that are less necessary or work less well,” Gordon said.
The good bit, according to Gordon, is how MiCA leaves the responsibility of asset listing to the crypto asset service provider. He said the part of the regulation he'd leave behind includes limitations on stablecoins, such as the cap on the use of non-euro denominated stablecoins.
“There’s a real opportunity for the UK to bring in some sensible and proportionate rules for stablecoins and to see the sterling stablecoin market grow,” he said.
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