British financial regulator Monday said it is planning to come out with a framework for a cryptocurrency policy later in the year.
The Financial Conduct Authority (FCA) announced this as part of its detailed 'Business Plan' for the year 2018-19.
"We will work with the Bank of England and the Treasury as part of a taskforce to develop thinking and publish a Discussion Paper later this year outlining our policy thinking on cryptocurrencies," the business plan stated.
The FCA has chalked out "Review of cryptocurrencies as part of the Treasury, Bank of England and FCA Taskforce" as part of its priority work for the year ahead.
It also set the second quarter of 2018-19 as the deadline for the review of Cryptocurrencies and to come out with an assessment report in conjunction with the Bank of England and the Treasury.
"Cryptocurrencies has been an area of increasing interest for markets and regulators globally. In the UK, the Treasury Committee has announced that it will be launching an enquiry, to which we intend to respond."
The regulator said cryptocurrencies themselves, primarily as a means of payment/exchange, are not currently within its regulatory perimeter.
However, it said some models of use or packaging cryptocurrencies bring them within its perimeter, making the landscape complex.
In mid-November, the FCA had issued a warning aimed at retail investors on the risks of investing in cryptocurrency Contracts for Difference (CFD) and Initial Coin Offerings (ICOs).
Cryptocurrency CFDs allow investors to speculate on a change in price of a cryptocurrency such as Bitcoin or Ethereum. The volatility of cryptocurrencies often lead to investors losing money very rapidly.
The British government had in late March announced the creation of a Cryptoassets Task Force that it hopes will help to manage the risks surrounding such tokens and harness the potential benefits of the underlying technology such as Blockchain. The Task Force consisted of the Treasury, the Bank of England, and the FCA.
In late February, the Treasury Committee of the U.K. Parliament launched a new inquiry into digital currencies and distributed ledger technology which was aimed at providing adequate protection for consumers and businesses without stifling innovation.
Meanwhile, seven cryptocurrency companies have in February floated an independent trade organization in the U.K. to bring self regulation into the industry. The group named CyrptoUK was formed by Coinbase, Etoro, Cryptocompare, Blockex, Cex.io, Commerceblock, and Coinshares.
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