November 28, 2024
By Our Correspondent
The ownership of cryptocurrency among investors in the United Kingdom is on the rise, leading to heightened scrutiny from the nation’s primary financial regulatory authority. As reported by the Financial Conduct Authority (FCA) on November 26, over 12% of adults in the UK now possess cryptocurrency, with an average value reaching approximately 1,842 British pounds ($2,318).
This marks an increase from June 2023, when only 10% of the UK population reported holding digital assets, according to an earlier FCA survey. The increasing number of cryptocurrency holders indicates a robust demand for digital assets, as noted by George McDonaugh, co-managing director and co-founder of the investment firm KR1. McDonaugh emphasized the necessity for the UK to take decisive action. He stated, “The growing perception of cryptocurrency as a component of broader investment portfolios, particularly for long-term strategies, signifies that digital assets have entered the mainstream.”
He further remarked, “This research clearly illustrates that cryptocurrency is already quite popular among consumers in the UK — it is imperative for regulators and lawmakers to keep pace.” In response to the rising interest from investors, the FCA, the leading financial regulator in the UK, has unveiled a regulatory roadmap aimed at establishing comprehensive cryptocurrency regulations by 2026. This proposed regulatory framework arrives at a pivotal moment for the cryptocurrency sector, presenting the UK with an opportunity to secure a competitive edge in Web3 innovation, according to McDonaugh.
He asserted, “It is crucial for the UK government to define its regulatory framework for the crypto industry, enabling digital asset enterprises to contribute to economic growth, enhance skills, and generate employment.” The roadmap outlines a series of consultations designed to ensure transparency and efficiency in the regulatory process, with initial discussions and consultation papers focused on stablecoin issuance and custody expected in the fourth quarter of 2024.
In 2025, additional consultation papers regarding trading platforms and decentralized finance (DeFi) activities, including staking and lending, are expected to be published. The Financial Conduct Authority (FCA) intends to issue the final set of regulations in 2026, coinciding with the full implementation of the new regulatory framework.
Matthew Long, the FCA’s director of payments and digital assets, emphasized that the findings from the research underscore the necessity for clear regulations. He stated, “Our goal is to cultivate a sector that fosters innovation while ensuring market integrity and consumer confidence.” There is a growing interest in cryptocurrency regulation as stakeholders anticipate the implementation of the Markets in Crypto-Assets Regulation (MiCA), which will be the first comprehensive regulatory framework of its kind and is scheduled to be fully enacted in the European Union by the end of 2024.
