(Kitco News) – British Member of Parliament Andrew Griffith has proposed several new amendments to the U.K.’s Financial Services and Markets bill looking to establish a more comprehensive regulatory framework around crypto in the country.
The new clause is intended “to clarify that the powers relating to financial promotion and regulated activities can be relied on to regulate crypto assets and activities relating to crypto assets,” according to a note from Griffith. “Cryptoasset is also defined, with a power to amend the definition,” the legislator added.
If accepted, the amendments will bestow increased oversight powers over crypto regulation to the Financial Conduct Authority (FCA) and H.M. Treasury. This proposal follows a move by the FCA in August to finalize stronger rules requiring firms marketing “high-risk investments” to include better risk warnings.
The new amendments are expected to be voted on by November 3, barring any unexpected changes in the legislative schedule that arise as a result of Prime Minister Liz Truss’ resignation on Thursday.
Once the Financial Services and Markets bill is passed, the U.K. will have a regulatory framework similar to the E.U., which is being established by its comprehensive Markets in Crypto-Assets (MiCA) regulation. Lawmakers in the E.U. voted in favor of the MiCA earlier in October, and it is expected to go into effect in 2024.
The E.U. highlights the need to regulate DeFi
Jumping over to the E.U., a new research report released by the European Commission this week is warning that standard financial policies are insufficient when it comes to regulating the decentralized finance (Defi) sector of the crypto economy.
To help rectify matters, the report laid out several policy proposals that it thinks will help better supervise and regulate DeFi.
One proposal looks to establish a separate policy to regulate the activity of legal entities based on micro-prudential requirements. This would apply to “entities that were legally subjected to the authority of standard public institutions,” according to the report.
A second proposal seeks to establish a voluntary compliance framework that would cover both protocols and legal entities. It would make it so that “protocols and users freely choose to adhere to some policy requirements in order to obtain different forms of public support and guarantee such as a stamp of public approval,” the report said.
A third proposal seeks to create a public observatory based on public opinions and on-chain data that would “deploy public investigations and issue opinions and warnings publicly about specific Defi protocols, practices and public address activities.”
The final recommendation from the study encouraged the development of oracle markets, as oracles are seen as a “key to the expansion of the information structure – and the contracting space – of Defi services.” According to the report, oracles are a key piece of infrastructure needed to connect Defi with traditional economies.
The report concluded by saying that “Defi holds a credible promise for new forms of financial services adapted to a globalized, competitive and digital economy.” The overarching goal of the report is to “support the early stages of a coordinated public effort to promote the growth of Defi products that are both sustainable and harmonized with general public policy goals such as financial stability, economic inclusion, market integrity and consumer protection.”
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