the pond, the markets and crypto assets regulatory deadline hits Europe in just a few hours and crypto company or exchange that serves the clients without a formal legal license after midnight is operating illegally and faces massive fines as well as for shutdowns.
Now this will impact the world's largest crypto exchange finance, which is ending services after it failed to secure a license in the region.
And the world's leading dollar backed stablecointether has not sought authorization so major exchanges have delisted or stripped away USDT spot trading pairs for the residents at the same time, the UK's Financial Conduct Authority announcing that it has that landmark rules to cement the UK's place as a global hub.
Now crypto firms will be able to apply for authorization to.
Operated in the UK when the new rules come into effect in October of next year while following all of this from the London is TV contributor as well as editor of the newsletter the signal and and good morning and good afternoon to you across the pond.
So first and foremost take us through the FCA announcement of a landmark crypto rules.
Tell us a little bit more.
So, it is a landmark, but it has been coming.
The legislation has been in place for this for a while, but we've been awaiting the rulebooks to actually understand how it's all gonna work.
And as a result, this is, you know, the, the culmination of 4.
That we've seen since 2023.
It's a really exciting moment for the UK just gaining that clarity.
The rules cover everything from issuance to market abuse, regimes, lending, borrowing, custody, um, and then capital and prudential collaboration as well.
Um, Most of this is as expected.
Um, there are slight changes.
That have been made to the stablecoin's capital requirements that's been lowered from 2% to 1%, which is off the back of a lot of industry pressure and with a view to keep the UK's competitive space.
There are still lots of things going on around stablecoins.
Bank of England and the FCA are working together on when stablecoins become a systemic issue, so that's sort of.
TBC and again also in the to be confirmed, um, you know, scope is also the DI treatment we're expecting a consultation later in the year, um, as well as the staking perimeter issues.
Um, but all of which to say it's, um, you know, the five final policy statements for for the majority of crypto asset activities for the UK.
And Anastasia, for our viewers here stateside, give us an idea of the difference between what the UK is doing versus the EU.
So what is the difference of that channel making when we're talking about the regulatory landscape?
Well, the tension has always been between whether you align things and make it easy for crypto firms to work both in the EU and the UK, or you see this as an opportunity to be competitive and make the UK a different space.
And that capital requirements point, I think is one of the differences we've definitely seen.
I think you mentioned tether distance itself from Mika on the basis of these types of things.
Um, but, you know, overall, we've got a lot to learn from from Mika, I think, particularly when it comes to authorizations.
Um, but then you've also got the Mika 2.0 consultation coming out where they're looking at the areas that they did not cover, for example, um, lending.
Um, that registration point, I think, is the clear bit of learning for us, um, that we can do.
What this did set out for us is a really clear timeline, and that timeline goes from, um, now until July.
You have pre-applic applications, they're putting together meetings, they're putting out the webinars to really bring people on board for what they need to do.
Authorization opens on the 13th of September.
That follows through until the end of February, and then everything has to come into place. for the end of October.
So from, you know, September through to that October point, you're talking an awful long time, that you've also given yourself a good window between the authorization application window closing, and it coming into play.
The key is going to be, can you do that with, you know, more seamlessly than the EU and then what we've seen in some of the EU.
And less than 60 seconds here Anastasia, but you are 5 hours ahead of us, so you are fast approaching that July 1st deadline.
What will happen to European customers when they wake up tomorrow?
What are the expectations and what is the scale potential scale for firms that miss the deadline?
If you haven't got a MICA license, you are no longer allowed to operate in the EU, and there are a few options for those who haven't.
They can merge with a company that has got a MICA license, but really it's been a process that's been less than perfect, and it's shown a lot of the tensions across the member states, but it's also shown the imperfections, I think, in some parts of the industry of what was considered necessary in the application process.
Well, Anastasia, always great having you on the show.
Thank you so much for joining us and thank you so much for sharing your insights and analysis.
Thanks, Remy.
