The deadline for comments on the consultation paper and for the UK Treasury to publish evidence on a proposed regulatory framework for crypto assets has arrived. The long-awaited paper, published in February, drew detailed responses from various cryptocurrency industry players. Block chain provider Polygon Labs , Venture Capitalist Andreessen Horowitz (A16Z), The Association for EUROPEAN Financial Markets (AFME) and the Digital Pound Foundation (DPF) Public Responses to the call for comments on May 1. Amid the diverse voices, some common questions we raised.
The Treasury's call for "same risk, same regulatory outcome" has been well met, although there is no unified understanding of what that means beyond the basis of the Financial Services and Markets Act 2000. California-based a16z pointed to the SEC's reliance on the Howey test when companies evaluate UK proposals. In reply, a16z wrote: "It is encouraging that Treasury's interpretation of this principle recognizes that it does not mean that exactly the same form of regulation applies in all cases to achieve the same regulatory out come."
This has to do with the proposal's emphasis on regulatory activity than the assets themslves. The functional distribution partialized Finan CE (CEFI) and Decentralized Finance (DEFI) is at the heart of this discussion. systems are very different from those of the centralized system (such as CeFi or the traditional financial system). To this end, "same risk, same regulatory outcome" is updated to "different risk sources, same Regulatory results "could be more accurate. "
The proposed framework treats fiat-backed and algorithmic stablecoins differently, classifying algorithmic stablecoins as “unbacked cryptoassets.” In this context, Polygon particularly favors an activity-based regulatory approach. AFME, in partnership with consult ancy Clifford Chance, responded by noting the importance of a global taxonomy of cryptoassets for effective international regulation and the importance of a “same activity” approach excluding blockchain-based representations of value such as loyalty and rewards schemes . AFME also determined the geographic scope of proposed encryption tion regulations that would apply to companies providing services to UK nationals. It noted that this was broader than the regulations on traditional assets.
The DPF has commented in detail on possible deviations from the “same risk, same regulatory outcome” principle when dealing with multiple forms of crypto assets. The classification of stablecoins is one of the points it believes needs clarification in this regard. The UK government will respond to the collection of responses received to its document and, in the next step, conduct further consultations on specific rules, should they be "moved forward".
