In a welcome move, the UK authorities have taken long-awaited decisions to bring the promotion of crypto assets under the umbrella of financial services regulation.
But the devil will be in the details. The government and the regulator, the Financial Conduct Authority (FCA), will have to act wisely to balance the need to protect investors with the important aim of encouraging the development of this huge financial innovation.
The official action is timely given the huge expansion of crypto investment, not least among retail investors, including many inexperienced people investing for the first time.
The recent turmoil in financial markets, including sharp corrections in crypto assets, highlights the risks of such investments and therefore the need for good regulation.
The Treasury, following a public consultation last year, has announced it is ready to put before parliament proposals to tighten the regulation of higher-risk assets including crypto.
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