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<p>The UK’s approach to cryptoassets was outlined in the 2018 Cryptoassets Taskforce
report, and in July last year the FCA set out its position in relation to the regulatory
perimeter in this space. The government and regulators have since taken steps to continue
encouraging responsible innovation in this area, while also mitigating risks to consumers
and markets.</p><p>For instance, this January the Treasury transposed the cryptoasset
provisions set out in the EU Fifth Anti-Money Laundering Directive (5MLD). This will
combat the risk of cryptoassets being used for illicit activity, in support of the
government’s aims for the sector.</p><p>More broadly, the government is committed
to creating an environment where tech businesses can thrive by investing in areas
such as talent, cutting-edge research and growth finance. Venture capital investment
in the UK tech sector grew by 44 per cent in 2019, from £7.1bn to £10.1bn. This was
a faster growth rate than both the US and China.</p><p>The financial regulators continue
to provide a platform that facilitates innovation in this space. For example, the
Financial Conduct Authority has accepted a significant number of DLT-based projects
into its Regulatory Sandbox to help enable the adoption of this technology to deliver
better financial services with appropriate consumer safeguards.</p>
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