The Financial Services and Market Bill (FSMB) has recently been approved by King Charles, recognizing digital assets and stablecoins as regulated financial activity in the United Kingdom. After Brexit put a hitch in the existing financial services rules, the bill aims to restore control. Under FSMB legislation, digital assets will be included in the Financial Services and Markets Act 2000 (FSMA), a core framework to regulate stablecoins and digital assets in the UK.
The Treasury’s consultation on the matter finished in April 2023 and served as a cornerstone for the acceptance of digital asset activity into FSMA. FTX-saga-like scandals, critical bankruptcies, economic losses, regulatory scrutiny in the US, and a scarce regulatory framework in Britain have all been major sources of motivation for its passing.
Further, theFSMP gives power to the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) to identify regulatory guidelines. The 340-page bill was introduced in July 2022 to take full advantage of Brexit, followed by amendments that extended into October to validate digital assets. It completed its third reading and received Royal Assent on June 29, 2023.
Elsewhere, the EU is doggedly progressing towards a full implementation of MiCA framework. Still running on schedule, it intends to upgrade their existing regulations by the end of 2024. these developments put the United Kingdom in line with the EU in regards to the crypto industry, whereas the US still has not established a comprehensive regulatory framework for digital assets.