Cryptocurrency regulations in the UK could take up to 24 months to be introduced according to a legal expert at a UK based law firm.
James Kaufmann, Legal Director at Reynolds Porter Chamberlain (RPC) the UK, while commenting on the subject in astatement published by his company, said it could take two years to introduce such regulations due to a couple of reasons. To achieve the results within such a timeline is based on a best-case scenario where the proposals with the House of Commons Treasury Committee report starts to progress.
RPC is a London based corporate law firm with offices in the UK and Asia. The firm which has over 80 partners, has been named Law Firm of the Year three times in a row since 2014.
To regulate cryptocurrencies, HM Treasury needs the will to:
- Assess which specific activities related to cryptocurrencies need regulating perhaps with a market study
- Draft proposed regulations open to consultation
- After the consultation period has closed, publish changes and set an implementation date.
According to Kaufmann, the processes required to move such bills forwards are often “lengthy,” given that the recent proposals sent to House of Commons Treasury Committee (HM Treasury) have just begun to move forward. He noted in the release,
“Bringing a complex and fast-evolving area like cryptocurrencies into a regulatory framework is going to be a difficult and lengthy process. Added to this, big issues like Brexit are already occupying a lot of regulator’s time,”
Kaufmann stated in the release:
“Past precedents show it can take years to make relatively minor regulatory changes to the financial regulatory regime. For example, it took two and a half years from the Treasury’s original announcement (10 May 2004) for the regulation of home reversion plans to come in force (6 November 2006).”
To regulate cryptocurrencies, the Treasury Committee will need time to study the industry to know which “specific activities related to cryptocurrencies”require monitoring, draft proposed regulations, allow for a consultation period, publish changes and set an implementation date.
Even if the latest proposals are fast-tracked, Kaufmann believes
“years for regulations to cover the UK cryptocurrency market that treads the middle ground between protecting retail participants and allowing the UK’s cryptocurrency market to thrive.”
The introduction of new regulations could also result in an increased role for the Financial Conduct Authority (FCA), the regulatory body for the financial sector. This raises questions as to whether the FCA has the wherewithal to regulate the crypto industry. According to the press release, the FCA would be tasked in the coming months on whether or not it has the funding, the requisite expertise, and the readiness to mitigate the reaction of the cryptocurrency markets to the regulations when they go live.
Joining the voices of the Treasury Committee report, the European Parliament has also called for cryptocurrencies to be regulated across the region and it has developed a proposal similar to the Treasury Committee’s report titled “Motion for a resolution on distributed ledger technologies and blockchains: building trust with disintermediation.”
“The race to establish a workable and regulated regime for cryptocurrencies is surely worth winning as their usage becomes more widespread across Europe and globally,” Kaufmann commented.
Earlier last month, HM Treasury called a resolution to discuss issues surrounding cryptocurrencies such as hacker attacks and money laundering.