UK’s Financial Conduct Authority (FCA) plans to waive some of its rules for cryptocurrency, according to a Financial Times (FT) report on Wednesday.
In another area, however, FCA intends to tighten the rules in which they relate to industry-specific risks, such as cyber attacks.
The financial watchdog wants to adapt its existing rules for financial service companies to the unique nature of cryptoassets, reported FT, citing a consultation document that was published on Wednesday.
“You have to acknowledge that some of these things are very different,” said David Geal, FCA’s CEO of payments and digital financing, in an interview according to the report, adding that a “lift and drop” of existing traditional financial rules would not be effective with crypto.
Such an area that can be handled differently is the provision that a company “has to do its business with integrity” and “pay duly consideration of its customers’ interest and treat them fairly.”
Crypto companies would have less strict requirements than banks or investment platforms on rules on senior leaders, systems and controls, as cryptocurrency companies “do not typically pose the same level of systemic risk,” FCA said.
Businesses would also not have to offer customers a cooling period due to the Voltatile nature of crypto prices, and technology would also not be classified as an outsourcing event that requires extra risk management. This is because blockchain technology is often permitted, which means that anyone can participate without input from an intermediary.
Other areas of crypto regulation remain indefinite.
FCA plans to fully integrate cryptocurrency into its regulatory framework from 2026.
