Jul 18, 2024 12:25
TheFinancial Conduct Authority (FCA) has significantly expanded its cryptocurrencyworkforce to over 100 staff members, yet its policy team remains understaffed,according to data obtained by blockchain finance provider Quant through aFreedom of Information request.
FCA Crypto Staff Surges,But Policy Team Lags Behind
The FCA nowemploys 109 staff dedicated to crypto assets, a huge increase from just 9 in2019. However, only 18 of these employees work in the policy department,responsible for drafting and implementing market regulations.
The datareveals that most of the FCA's crypto workforce is split between authorization(31 staff members) and supervision (31 staff members). They focus on granting regulatorypermissions and monitoring compliance respectively. Even though the policy team has grown from 11 members in 2023 to 18 in 2024, it still lags behind otherdepartments.
Thereis now widespread recognition that the unregulated crypto experiment hasfailed, said Gilbert Verdian, Founder and CEO of Quant. But digitalassets and tokenization improve many areas within financial services. The issueis that the UK lacks a body which can drive forward responsible and innovativeregulation to govern all of this.
Thefindings come as the new Labour government has pledged to streamline theregulatory rulebook under its Plan for Financial Services. Thiscommitment puts pressure on the ruling officials to provide clearer regulatoryguidance for the crypto sector or risk losing firms to other jurisdictions.
Properlyregulated crypto assets have the potential to transform our economy and thefinancial services sector, Tulip Siddiq, the new City Minister,previously commented. Quant argues, however, that if only 18 employees areresponsible for creating cryptocurrency regulations, the UK could face acrypto catastrophe.
FCA Needs Digital FinanceAgency
Notably,the data also highlights a significant resource gap in crypto asset wholesalepolicy, with only 9 employees in this crucial area. This shortage could posechallenges to Labour's stated goal of embracing securities tokenizationand a central bank digital currency.
Verdiansuggests a potential solution: A separate 'Digital Finance Agency'dedicated entirely to digital assets can help the UK stay ahead of the packwhen it comes to the future of finance.
Digitalassets can bring major efficiency benefits to wholesale financial markets andto realise this potential at scale, we need a new regulatory approach, QuantsCEO concluded.
The FCAemphasized that beyond its dedicated crypto teams, it employs specialistsacross the organization who work on crypto assets alongside other sectors.
InFebruary, the UK government announced its intention to implement themuch-anticipated cryptocurrency regulations over the next six months.Subsequently, in April, Economic Secretary Bim Afolami predicted that theseregulations would be introduced by June or July. However, the industry is stillawaiting their implementation. This development follows the passing of theFinancial Services and Markets Act in June 2023, which classifiedcryptocurrencies as regulated financial activities.
This article was written by Damian Chmiel at www.financemagnates.com.
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