CryptoSprint outputs

Learn more about our first policy-focused CryptoSprint events held in May and June 2022.

The objective of the events was to seek industry views around the current market and the design of an appropriate regulatory regime.

The crypto market is developing at pace. Currently the FCA’s role is focused on registering firms for anti-money laundering purposes, whilst the majority of cryptoassets and associated busineses remain unregulated.

Following the Government’s recent announcement that they will consult later this year on further regulating cryptoassets beyond the Money Laundering Regulations, we are working closely with them on what this might mean. The proposed plans for financial promotions, stablecoins used for payments, and the Financial Markets Infrastructure Sandbox are part of this, but there is much more to consider to ensure the UK has an appropriate, and workable crypto regulatory framework for consumers, businesses, and markets.

The FCA has a global reputation for supporting innovative financial service firms and products that benefit consumers and markets. Its support for innovation, for example its regulatory sandbox in which new propositions can be tested safely with real consumers, has been adopted by regulators around the world. 

What the FCA’s approach has shown is that regulation can support developing ideas. As a result, the FCA held a series of CryptoSprints to consider what regulation of crypto could or should look like in the future. We heard a rich and diverse set of views from the 184 participants. 

We are continuing our industry engagement following the events, informed by the feedback we obtained. All of the views and issues raised are feeding into our ongoing policy development programme both domestically and internationally.

Event aims and format 

The main aim of the event was to increase our understanding of emerging cryptoasset market practices and to seek views from the industry on what an appropriate regulatory regime might look like. We wanted to consider how further cryptoasset regulation could ensure consumers and markets have sufficient protection as the industry evolves. Alongside this, we also wanted to consider, and be open to, the opportunities and improvement to market function that the new industry and technology may provide and how regulation might support this. 

Teams, each including an FCA facilitator, focused on one of three problem statements covering key stages in the cryptoassets lifecycle, the key regulatory challenges, and opportunities of cryptoassets. The problem statements were centred on issuance and disclosure, on whom and where regulation should apply, and custody. 

Key themes

Next steps

The CryptoSprint events have provided valuable information to inform our ongoing policy thinking. We have set up workstreams to further understand what future crypto standards and requirements may mean for other areas, like:

  • environmental social and governance (ESG) considerations
  • redress
  • market conduct
  • operational resilience
  • and insolvency

Our aim is to continue engaging with industry experts and have deep dive sessions to further develop our policy thinking. 

A common theme highlighted during the CryptoSprint was an imbalance of information between consumers and service providers, and challenges faced by consumers to fully understand the risks associated with investing in cryptoassets. Through our InvestSmart campaign, we are raising awareness and educating retail consumers by highlighting the risk of investing in cryptoassets.

Following the Treasury's consultation response on stablecoins used for payments in April 2022, we are also working with the Treasury, the Bank of England, and the Payment Systems Regulator (PSR) to develop an appropriate regime, including whether any FCA rules and guidance need adapting to support innovation while protecting consumers and the market.  

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