British financial supervision increases enforcement measures against problem companies

The British financial supervisory authority plans to increase enforcement measures by taking a broad procedure against so -called "problem companies" in the entire financial services area.

The Financial Conduct Authority said on Thursday that she would hire 80 employees to pursue business who do not fulfill basic regulatory standards in all sectors while she explained her strategy for the next three years. There will also be new rules to cover crypto-assets, including stable coins that are covered with traditional assets.

crypto groups have criticized the regulatory authority for one in their opinion, and the government presented its own plans this week to make Britain a center for digital finances. But the careful attitude of the regulatory authority underlines its position that standards must not be compromised.

"Risks for consumers and the market must be appropriately reduced. This can require further regulation of crypto-assets in the course of the development of the industry," said the FCA.

The Ministry of Finance said this week that it intended to bring stable coins into the area of ​​responsibility of the supervisory authority if they are used for payments. The FCA said that it would be advised later this year about regulating these tokens.

"crypto-assets were an important focus for the regulatory authority. However, those in the crypto-asset industry will probably not agree to this approach," said Syedur Rahman, partner of the Rahman Ravelli law firm. "A stricter regulation could manipulate privacy [and] innovation."

The FCA said that it supports innovations in financial services as long as they “have applications that are in the public interest”, and found that stable coin payments could reduce fees and make transactions more smoothly.

Traditionally, stablecoins were mainly used to buy other volatile cryptocurrencies such as Bitcoin, but issuers have increasingly promoted currencies as tools for transfers and faster transfers.

The rapid growth of the StableCoin market-which, according to the cryptocurrency data page Coingecko, has increased from $ 7 billion to almost $ 190 billion in two years-has led to fears regarding its possible effects on monetary policy and financial stability.

The Bank of England's Financial Policy Warned last month that fluctuations in its value could endanger the financial markets if a stablecoin was widespread for payments, and called for a framework of regulation to reduce these risks.

A group of high-ranking US supervisory authorities and the finance minister said in a report published in November that legislation was "urgently needed".

The ambiguity in relation to the reserves that support some stable coins is one of the concerns of the supervisory authorities. According to the most recent certificate from the market leader Tether, it held a considerable part of his reserves in Commercial Paper at the end of 2021, a form of short -term debt, unknown origin or nationality.

The FCA said that it will make sure that crypto companies will comply with the regulations to combat money laundering and promised to intervene "where companies harm consumers or market integrity". It should receive new powers to monitor advertising campaigns for digital assets.

"Currently crypto-assets in the United Kingdom are only regulated for money laundering purposes, and we have no behavioral or consumer protection powers about the industry," said the regulatory authority.

The government said at the beginning of this week that it would initiate a consultation for a more comprehensive set of rules for the market for digital assets. Sarah Pritchard, Executive Director of Markets at the FCA, said that the regulatory authority would "continue to work closely with the government before its consultation" to develop rules for crypto activities.