a16z Policy Director: The UK government has a clear interest in embracing blockchain and crypto innovation

Brian Quintenz, director of policy at a16z, posted on the X platform that the British Treasury has issued a conclusive statement on the crypto-asset regulatory system. Andrew Griffith, Economic Secretary to the UK Treasury, made the government’s interest in embracing blockchain and crypto innovation very clear, “The government’s ambition to make the UK a global hub for crypto asset technology remains unwavering… With clarity on the future regulatory framework, and With the passing of the Financial Services and Markets Act, the UK is the obvious choice to start and expand a crypto-asset business.” HM Treasury’s response is summarized below: - Temporarily exclude airdrops from the regulatory scope of token issuance as they do not constitute a public sale; - Make it clear that NFTs are not within the scope of regulation, specifically mentioning in-game purchases and sales of digital items as examples of non-financial services activities; - Reiterating cautious action on DeFi and formally acknowledging that DeFi is likely to play an important role in financial services as the crypto-asset industry scales and financial markets continue to adopt blockchain-based solutions. Therefore, consistent with the government’s innovative forward-looking approach, the government does not intend to ban DeFi; - Strong opposition to the characterization of crypto trading as gambling or outright bans on crypto trading, on the grounds that these approaches deviate from international regulatory workflows and cause harm to crypto-based innovation; Quintenz added that more details on the concept of decentralization are still needed to ensure that regulators fully recognize the core benefits of the technology and to ensure that customers are protected from the traditional risks of centralization. Earlier today, the UK Treasury stated in the "Final Proposals for Crypto-Asset Regulation" released that the government's position is that companies dealing directly with UK retail consumers should be required to obtain authorization regardless of their location. . The proposal summarizes the UK government’s intention to bring some crypto-asset activities within the scope of financial services regulation for the first time and describes how companies engaging in crypto-asset activities will now have to obtain authorization from the UK’s Financial Conduct Authority, including a provision for cryptocurrency exchanges to Detailed requirements for admission criteria and mandatory disclosures should be introduced when listing new assets.