The U.K. Treasury announced a plan on March 15 to tax crypto holdings from 2025, marking an important step in the regulation of the crypto market. The Treasury’s decision to tax cryptocurrencies separately on tax returns is expected to generate more than £10 million in tax revenue each year.
HM Treasury levy #cryptocurrency Holdings in 2025 @azcoinnews https://t.co/gvtepnp39e
— Kyptos (@azcoinnews) March 16, 2023
In addition to taxation, the UK government also wants to regulate cryptocurrency trading platforms and lenders. Treasury has published a consultation paper, open for comments until 30 April, to provide clarity to consumers and businesses. The document outlines plans to impose detailed content requirements for cryptocurrency exchanges and stricter regulation of financial brokers and fiduciaries.
The consultation paper also includes information on algorithmic stablecoins, NFTs and ICOs. While the Treasury Department has decided not to ban algorithmic stablecoins, it has warned against using the word “stable” in related marketing.
The Treasury stated that cryptocurrencies fall within the scope of the Financial Services and Markets Act (FSMA) and that there will not be a separate regulatory framework for cryptocurrencies. Instead, aiming to level the playing field between cryptocurrencies and traditional finance, the Financial Conduct Authority (FCA) amended the existing FSMA regarding the crypto market.
However, the proposed regulations could create problems for cryptocurrency market participants, who may have to go through a broader vetting process in addition to the system registration process. They have completed the FCA license.
The Treasury Department is expected to respond to the consultation paper by the end of April, while it remains to be seen how the cryptocurrency market will react to the proposed regulations and taxes. The UK’s decision to tax cryptocurrencies and regulate trading platforms and lenders could set a precedent for how other countries can quickly regulate the fledgling cryptocurrency market.
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according to Kyptos