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UK crypto hub could have 'significant competitive advantage' over EU, claims Revolut lead

Alexander Spatari via Getty Images

The UK's planned crypto hub could have a "significant competitive advantage compared to the MiCA regime in Europe", claims Revolut's chief legal counsel Konstantinos Adamos.

Adamos added in a note published Wednesday that the UK Treasury's crypto-assets consultation has a provision that would "help strengthen the UK’s position in leading international cooperation and shaping global minimum standards for the regulation of cryptoassets".

He said: "The consultation refers to 'equivalence' exemptions, leaving open the possibility that firms authorised in the EU or other jurisdictions that are considered as equivalent from a regulatory standpoint will be able to access the UK market.

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"The details for this remain to be seen but this could prove to be a significant competitive advantage compared to the MiCA regime and help strengthen the UK’s position in leading international cooperation and shaping global minimum standards for the regulation of cryptoassets."

Read more: Bank of England sets out new plans to regulate crypto

The European Parliament has voted in favour of the Markets in Cryptoassets Regulation (MiCA), a comprehensive set of rules for the nascent industry, while the UK government aims to turn the country into a global crypto hub.

As part of HM Treasury's consultation and call for evidence, the UK is proposing a comprehensive regime for the regulation of cryptoassets, introducing a phased approach with a "Designated Activities Regime" (DAR) and regulations under the Financial Services and Markets Act.

Read more: Philip Hammond warns of 'real risk' to London financial services from EU crypto bill

The UK aims to establish a regulatory framework that fosters innovation and achieves consumer protection.

Adamos argues that "the UK has a unique opportunity to develop a framework that strikes the right balance in fostering innovation while achieving consumer protection and it is already well positioned to attract more business and investment in this sector".

The Revolut legal counsel contrasted the UK's approach with the approach of the US Securities and Exchange Commission (SEC).

Read more: Bitcoin sell signals escalate as investors fear US interest rate hike

He added: "This comes as a stark contrast to the situation in the US where the Securities and Exchange Commission (SEC) is pursuing an approach of regulation by enforcement.

"It is not without significance that one of the largest cryptoasset exchanges in the world (the largest in the US), Coinbase (COIN), a US- founded/headquartered and US listed company has recently stated that switching its headquarters to the UK was 'on the table', citing the lack of regulatory clarity in the US as the reason for this."

Watch: Philip Hammond warns of 'real risk' to London financial services from EU crypto bill | The Crypto Mile

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