International regulators should cooperate to develop a regulatory framework for cryptoassets – but not over-regulate the industry and kill innovation, according to a senior representative of the UK regulatory body Financial Conduct Authority (FCA).
David Raw, Co-Director of Consumer and Retail Policy at the FCA, said there is a need for “a new approach to regulating crypto because I think the industry is evolving so quickly.”
At the same time, bodies such as the FCA “cannot develop regulations in isolation,” he declared during a panel discussion hosted at the crypto and digital assets summit organized by The Financial Times on April 27, as quoted by the paper.
A collaboration between the world’s regulators is necessary to develop a global approach to cryptoasset regulation, allowing governments to coordinate their respective measures, according to the official. This said, the FCA is not planning to over-regulate the industry, Raw said.
“We cannot ignore the risks around fraud and financial crime but we cannot over-regulate and through over-regulating stamp out exciting innovations,” he said.
Meanwhile, to ensure that the industry can provide its input to the ongoing work by the FCA, the UK agency is planning to host a two-day CryptoSprint on May 10 and 11, seeking the sector’s feedback on how the world of cryptoassets could be regulated in the UK.
“We will work on three specific problem statements to explore the challenges facing the industry and provide an opportunity to collaborate on policy developments,” the FCA said in a statement.
The regulator added that this is the first time for them to be gathering views from the industry in this format, stating that,
“We see this as an excellent opportunity for organisations across the financial services ecosystem and beyond to work with us to help inform policy.”
Registration for participation in the event ended on April 20. The three fields of discussion will be centered around the following questions, according to the FCA:
- “How should information relating to issuance of cryptoassets be disclosed to investors?”
- “How do we identify (and test) where regulatory obligations on centralised and decentralised cryptoasset models should be placed? These should enable regulators to balance capturing relevant activity that poses a risk to UK consumers and markets now and as the sector evolves, whilst still enabling beneficial innovation.”
- “What gaps need to be addressed in the UK’s existing custody regulatory framework for custody of cryptoassets to help protect UK consumers and markets?”