UK FCA Seeks Public Input on Stablecoin & Crypto Custody
The UK’s FCA opens a public consultation on new rules for stablecoins and crypto custody services.
- FCA opens consultation on crypto custody and stablecoin rules.
- Aim is to strengthen consumer protection and market integrity.
- Responses are welcomed from the crypto industry and public.
The UK’s Financial Conduct Authority (FCA) has initiated a public consultation on proposed rules that would govern stablecoins and the custody of crypto assets. This move marks a critical step in shaping how digital assets will be regulated in the UK, especially as the market continues to grow and evolve.
The consultation is part of the UK government’s broader plan to establish a regulatory framework for crypto-related activities. It follows a commitment made in April 2022 to make the UK a global hub for crypto innovation. Now, the FCA is calling on the industry, stakeholders, and the general public to weigh in on how custody services and the use of stablecoins should be handled.
Focus on Consumer Protection and Market Integrity
One of the FCA’s main concerns is ensuring that consumers are protected when interacting with crypto services. With high-profile collapses in the sector and increasing interest in stablecoins like USDT and USDC, the authority is focusing on how these assets are held and safeguarded.
Under the proposed rules, companies offering custody services must meet strict operational standards, including asset segregation, record-keeping, and transparency. These rules are expected to bring crypto more in line with traditional financial services, aiming to reduce risk and increase public trust.
Stablecoin issuers would also face new requirements. This includes guidelines on maintaining reserves and ensuring redeemability, which will help prevent sudden collapses or freezing of customer funds.
Industry Response Could Shape Future Policy
The FCA is inviting comments until later this year, and the outcome of this consultation could significantly influence the final regulatory framework. Crypto firms operating in the UK, legal experts, and even consumers have a chance to participate in the process.
As crypto becomes more mainstream, governments around the world are beginning to take similar steps. The UK’s initiative reflects a growing awareness of the need for clear and balanced crypto regulations.
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