The deadline has come for feedback on a session paper and name for proof launched by the UK’s HM Treasury on a proposed crypto asset regulatory framework. The long-awaited paper, printed in February, drew detailed responses from a wide range of cryptocurrency trade gamers.
Blockchain supplier Polygon Labs, enterprise capitalists Andreessen Horowitz (a16z), the Affiliation for Monetary Markets in Europe (AFME) and the Digital Pound Basis (DPF) launched their responses on Could 1 to the decision for feedback. Amongst these numerous voices, some frequent points had been raised.
The Treasury’s name for “similar danger, similar regulatory consequence” was effectively met, though there was no uniform understanding of what that entailed, except for its foundation within the Monetary Providers and Markets Act of 2000. California-based a16z identified weaknesses in america Securities and Alternate Fee’s dependence on the Howey take a look at because the agency assessed the U.Okay. proposal. In its response, a16z wrote:
“It’s encouraging that the Treasury’s interpretation of this precept recognises that it doesn’t imply will probably be applicable to use precisely the identical type of regulation in all circumstances to realize the identical regulatory consequence.”
This tied into the proposal’s emphasis on regulating actions, fairly than belongings themselves. The essential variations between centralized finance (CeFi) and decentralized finance (DeFi) had been central to this dialogue. Polygon wrote:
“The supply of danger in DeFi techniques is considerably completely different than that in centralised techniques, like CeFi or the standard monetary system. To this finish, it might be extra correct to replace: ‘similar danger, similar regulatory consequence’ to ‘completely different supply of danger, similar regulatory consequence.’”
The proposed framework handled fiat-backed stablecoins and algorithmic stablecoins in a different way, classifying algorithmic stablecoins as an “unbacked cryptoasset.” Polygon notably favored the activity-based regulatory method on this case.
Associated: UK Treasury seeks enter on taxing DeFi staking and lending
The AFME, which labored with consulting agency Clifford Probability on its response, famous the significance of a world taxonomy of crypto belongings for efficient worldwide regulation and the “similar actions” method to exclude blockchain-based representations of worth resembling loyalty and rewards packages.
1/ @a16zcrypto submitted our response to the UK @HMTreasury “Future Monetary Providers Regulatory Regime for Cryptoassets” session. We enthusiastically embrace the UK’s method for a “proportionate and centered, agile and versatile,” regime. . . https://t.co/rT85Xfd8so
— Brian Quintenz (@BrianQuintenz) Could 1, 2023
The AFME additionally recognized the territorial scope of the proposed crypto rules, that are written to use to corporations that present companies to U.Okay. nationals. That could be a broader scope than rules regarding conventional belongings have, it famous.
The DPF perceived potential deviations from the “similar danger, similar regulatory consequence” precept within the dealing with of a number of types of crypto belongings, and it commented on them intimately. The classification of stablecoins was one of many factors it thought wanted clarification on this regard.
The U.Okay. authorities will reply to the collected responses it acquired to its paper and have interaction in additional consultations on particular guidelines as its subsequent step, if they’re “taken ahead.”
Journal: Crypto regulation: Does SEC chair Gary Gensler have the ultimate say?
