Regulators are concerned with overseeing the activities of players in the digital asset industry, and countries are putting extra effort into achieving broader compliance.
Both regulators from the United States and the United Kingdom have agreed to partner on initiatives focusing on regulations of the crypto space. In addition, the regulators have once again reaffirmed their stance to support the industry and safeguard investors and traders.
Regulators’ Harp on Crypto Guidelines
According to the U.S. Treasury Department statement published last week, the UK-US Financial Regulatory Working Group held a meeting on July 21.
Participants in the meeting include senior officials from both countries’ regulatory agencies and other financial institutions. Furthermore, the statement revealed that the financial working group was established in 2008, long before the emergence of digital assets.
The group was created to strengthen regulatory cooperation and to ensure an orderly and efficient market in both territories.
As financial innovation emerges, regulators want to consider the complexities involved in overseeing the cryptocurrency ecosystem.
Participants deliberated and pledged to continue supporting safe, innovative financial services and strengthening regulatory outcomes within their jurisdictions.
The Treasury further added that the partnership is important to the global financial ecosystem and acknowledges the role of both parties in maintaining the drive.
Countries’ Continued Drive for Broader Crypto Regulations
The development and emergence of digital currencies is one trend toward ensuring diverse financial inclusion.
With millions of people around the world reportedly unbanked, cryptocurrency is seen as the solution that will offer new ways for people to access their transaction needs.
However, amid the growing demand for digital financial services, regulators are concerned with their impact on the broader macroeconomic landscape.
Recently, scrutiny of the cryptocurrency industry has been on the rise like never before due to the sector’s volatility.
However, regulating the digital asset space is more complicated than the traditional financial sector. As a result, regulatory watchdogs are adopting different strategies to meet their goals.
Achieving regulatory clarity is one thing, while implementing guidelines is another. Adoption of cryptocurrencies is likely determined by the quality or otherwise of regulations in a given country.
It is worth noting that regulatory uncertainty is the biggest problem that crypto service providers face in many countries. And this also affects people’s economic behavior due to the uncertainty they experience when making choices.
As a result, financial institution watchdogs in the United States and the E.U. are trying to provide a clear direction.
Regulations are intended to provide a clear path for the optimum performance of a sector. With the complex challenges of cryptocurrency, uniform guidelines for the E.U. and markets in crypto assets (MiCA) are already on the way.
For its part, the United States, through the Securities and Exchange Commission (SEC), is pushing for my compliance after the crash of the Terra LUNA ecosystem.