Regulations Round-Up: Malta Clarifies Law, UK Wealth Managers Urge FCA Action

In recent regulatory news, Malta’s financial regulator has sought to clarify the nation’s cryptocurrency regulations following the passing of an act pertaining to crypto assets, UK-based wealth managers have called for the FCA to take a strong stance regarding cryptocurrencies, and the deputy governor of Bank of Israel has predicted that cryptocurrencies will contribute to the financial system in future.

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Malta Clarifies Current Regulatory Apparatus Regarding Cryptocurrencies

The Malta Financial Services Authority (MFSA) has sought to clarify the country’s legislative apparatus pertaining to cryptocurrency following the passing of the “Virtual Financial Assets Act” on the 4th of July.

In a press release published by the MFSA which states that the act “it is not yet in force,” and that such won’t take effect until a date that “the Minister for Digital Economy may establish by notice in the Government Gazette.”

The statement asserts that the MFSA is currently developing the “Virtual Financial Assets Framework” which “underlies and complements” the act. Public consultation regarding the proposed framework ended on the 20th of July. The MFSA release seeks to emphasize that the framework is “not yet in force,” adding that “the MFSA will be in a position to start receiving requests for approvals and authorizations under the Act once the Framework is operational.”

Additionally, the public consultation period for Malta’s “Consultation Paper on the Virtual Financial Assets Rules for VFA Agents presenting Chapter 1 of the proposed Virtual Financial Assets Rulebook” ends on 31 July 2018. Consultation periods regarding chapters 2 and 3 of the proposed rulebook are also expected to begin in coming weeks.

UK Wealth Managers Call for Stronger Crypto Regulations

UK-based wealth management firms Wealthify, Nutmeg, and Scalable Capital have urged the Financial Conduct Authority (FCA) to adopt a stringent regulatory approach to cryptocurrencies.

Richard Theo, the chief executive officer of Wealthify, describes the FCA as having been “way too slow” in its response to cryptocurrencies.” Mr. Theo added that as a regulated firm, “there are a lot of tests we have to do before we can take on a client. But that same client can go and buy bitcoin with no questions asked. There are far more risks involved when investing in bitcoin. The FCA should get on to it fast.”

Scalable Capital chief executive officer, Simon Miller, asserted that “People see the explosion of digital currencies and say ‘I can make a lot of money quickly.’ But that’s not investing — that’s gambling. It needs to be looked at.”

Nutmeg’s James McManus added, “With cryptocurrencies gaining media attention for large gains but little to no attention for large losses, perhaps now is the time for regulators to take a closer look at the selling process around cryptocurrencies.”

Bank of Israel Deputy Governor Predicts Cryptocurrencies Will “Contribute” to Financial System

The deputy governor of the Bank of Israel, Dr. Nadine Bodo-Trachtenberg, asserted that “The technology of distributed and encrypted currencies has the “potential to contribute to the monetary and financial system in the long term” whilst speaking at the recent Bit2c Crypto Conference.

Whilst presenting the Israeli central bank’s position on virtual currencies, the Bank of Israel deputy governor downplayed the potential creative destruction that many have argued cryptocurrencies could cause within the financial industries, stating “I am told that digital coins can leave users with control over data and allow decentralization. But that’s what they promised about the internet – which ultimately created huge information giants that hurt competition. Token trading and smart contracts is a technology that expands the possibilities of money and trading in assets today, can streamline processes that pass through many intermediaries.”

Do you agree that cryptocurrencies will be a significant contributor to the mainstream financial system in future? Share your thoughts in the comments section below!

Images courtesy of Shutterstock, msfa.com.mt, Wikipedia

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