Bittrex Global CEO Oliver Linch says the UK crypto asset regulation proposals released earlier this week are a step in the right direction. He said the proposal is necessary for the UK to become a true crypto hub.
He added that although people have their reservations, the UK’s proposed guidance was the most likely route, and there’s still a lot to look forward to.
“People seem to be disappointed that the UK will not be adopting a big, showcase, stand-alone regulation like MiCA (in the EU), or the VARA Regulations (in Dubai), preferring instead to regulate crypto under existing markets legislation,” Linch said. “But there are many ways to skin a cat, and I’m more interested in substance than style.”
The new proposed rule will bring crypto assets under the same regulatory conditions as existing financial services laws. This will potentially make crypto assets acceptable as conventional financial instruments.
“It’s the UK’s first significant move towards treating crypto as a viable, grown-up asset class in serving the needs of both institutional and retail investors, albeit one that has garnered a somewhat lukewarm response thus far,” Linch told The Block via email. “While the reception from within the crypto community has been muted, I think that’s unfair,” he added.
The move may also increase investor confidence in crypto assets, especially among large financial institutions, Lunch said, adding that it could also reduce the risk of legislative missteps and encourage institutional investment.
Crypto Taking its Rightful Place
Before now, cryptocurrencies have been regarded as second class assets mainly because they were not regulated as traditional financial assets. In some countries, the use of digital assets has even been banned and those who use them are regarded as criminals.
The UK’s decision to incorporate digital assets into financial laws is therefore a way to bring crypto into the mainstream financial sector so that it can take its rightful place.
According to Linch, “the UK government is signaling that it agrees with Bittrex Global’s view that the future of crypto is simply as another (albeit hugely important) part of the financial sector; this is an important first step in crypto taking its rightful place at the adult’s table.”
Linch further stated that the new proposal should have come before the Financial Promotions rules, but it’s still a great first step towards providing the much needed regulatory clarity that the industry needs.
“Yes, these rules should have come before the recent changes to the Financial Promotions rules, but hopefully this is an indication that the government is now stepping up and providing that directional guidance that the UK needs if it is to become a true hub for digital assets,” he noted.
UK On the Way to Crypto Hub Status
The UK Prime Minister Rishi Sunak stated in June that he intended to bring clarity to the crypto industry and make the UK a crypto hub. According to Linch, this dream is quite realistic, especially as the UK has brought this proposal.
“There is much in the government’s response that suggests that this will be achieved in the UK, bringing the certainty that institutional investors and corporates will need to set up shop or relocate their operations, priming the UK to fulfill its ambition of becoming a much sought-after crypto hub,” Linch concluded.