FCA 'at a crossroads' in regulating digital assets

The FCA’s David Geale has called for firms to respond to the regulator’s consultation paper on regulated cryptoasset activities before the deadline tomorrow, 12 March.

The consultation, CP26/4: Application of FCA Handbook for regulated cryptoasset activities – part 2, focuses on how the FCA’s requirements apply to cryptoasset firms.

Geale, the FCA’s executive director, payments and digital finance, and PSR managing director, said the FCA will publish its final crypto rules this summer, before the gateway opens in September, in a speech at an event earlier this week.

“We want firms to succeed here, so have been working at pace to build a crypto regime that is proportionate and competitive,” Geale said, adding that the regulator is “open to innovation, but grounded in market integrity and trust”.

Geale added the FCA has been working closely with the industry through its stablecoins cohort in the regulatory sandbox.

“Just last week, we hosted a stablecoin sprint and are grateful for the brilliant ideas that we’re seeing,” he said.

The regulator is also part of the Payments Vision Delivery Committee, which published the Payments Froward plan in February.

Geale said the digital aspects are a key deliverable of the government’s National Payments Vision of a trusted, world-leading payments ecosystem.

“One built on next-generation technology, and in which consumers and businesses have a choice of payment methods to meet their needs,” he said.

However, he admitted regulating digital assets has its challenges.

“These initiatives are exciting. But we find ourselves at a crossroads, grappling with the perceived tension between growth and protection.”