Bim Afolami has been appointed as the economic secretary to the Treasury of the United Kingdom, where he will have authority over policies that impact the adoption of digital assets and central bank digital currencies within the country. This appointment comes as part of a restructuring effort by the UK government.
Former Economic Secretary’s Advocacy for Crypto
Under the administration of UK Prime Minister Rishi Sunak, the former Economic Secretary Andrew Griffith advocated for policies to establish the UK as a prominent crypto hub, including the introduction of stablecoins. Griffith has now been appointed as the next minister of state in the Department for Science, Innovation, and Technology.
Engagement of CryptoUK and Coinbase
CryptoUK, a self-regulatory trade association, has expressed its intention to brief Afolami on the potential contributions of cryptocurrencies to the UK economy, as well as the challenges faced by the sector. Afolami had previously met with senior representatives from Coinbase in June 2022, during which they discussed the regulatory environment. Afolami emphasized the importance of establishing an appropriate regulatory regime for certain financial services.
The UK government has been actively addressing policies related to artificial intelligence, financial technology, and the metaverse through regulatory measures, enforcement actions, and investigations.
Recent Regulations and Compliance
In October, the Financial Conduct Authority (FCA) implemented new rules pertaining to digital assets. These rules require crypto firms to register with the financial regulator and have their marketing materials approved by an FCA-authorized firm. Exchanges must provide clear warnings to customers about the risks associated with crypto investments, and marketing materials must be fair, transparent, and not misleading. Additionally, a 24-hour cooling-off period for new customers is required.
While the FCA extended the deadline for implementing technically challenging features like the cooling-off period until January 2024, firms are expected to adhere to the “core rules” from October 8. Leading crypto exchanges Coinbase, Revolut, and Binance have already updated their applications to comply with the new regulations.
However, the FCA has identified some recurring issues in the marketing of cryptoassets following the implementation of these new regulations. The agency has highlighted misleading claims regarding safety and security, insufficient risk warnings, and the failure to emphasize product-specific risks. To combat these issues, the FCA has issued more than 200 alerts against firms suspected of illegally promoting cryptoassets.
