Some Bitcoin-related Financial Products Could Be Banned in the UK Soon
The Financial Conduct Authority (FCA) of the UK is stepping up efforts to crack down on Bitcoin-related financial products. Bitcoin derivatives are in their crosshairs and we could see other Bitcoin-related products banned soon as well.
The FCA is cracking down on Bitcoin-related products. According to FCA executive director Christopher Woolard: “Most consumers cannot reliably value derivatives based on unregulated cryptoassets.”
FCA Steps in to Protect Consumers
The FCA claims the end goal is to protect everyday consumers. The agency is taking a forward step to stop massive losses due to the extreme volatility in the market. However, the FCA can’t stop the buying and selling of Bitcoin or any other cryptocurrencies, of course. What it can do, though, is ban the selling of Bitcoin-related products.
Any product sold that bets on a cryptocurrency’s future price may soon be banned in the UK as a result, according to the FCA. The government agency believes such products to be “ill-suited to retail consumers.” They also claim that its near-impossible to assess their risks and therefore there should be a moratorium on these financial offerings.
“We estimate the potential benefit to retail consumers from banning these products to be in a range from £75 million to £234.3 million a year,” the FCA said in a recent statement.
No Need to Panic
Although the FCA’s efforts are relatively minor compared to other countries, it will significantly lower Bitcoin’s access in the country. Other countries have taken more stringent efforts in curbing the cryptocurrency space. FOr example, China banned security token offerings last year. Various American Congressmen have even called for an outright ban.
Although the FCA’s crackdown will be relatively mild in comparison, it remains to be seen the effect it will have on Bitcoin’s market.
Do you believe the FCA is hurting innovation by doing this or is it the right way forward? Let us know your thoughts below.
Image courtesy of Fintechnology News.