Policy Exchange published the report on Web3, which contains 10 recommendations for the UK government.
The U.K. has an opportunity to capitalize on Web3 companies leaving the U.S. due to regulatory uncertainty. But to achieve that, the think tank said, the U.K. will need to follow its own regulatory path, relaxing requirements for cryptocurrencies in some ways.
On October 2, the influential conservative think tank Policy Exchange released a report on Web3, making 10 recommendations to the UK government, claiming that these recommendations will help the UK improve Web3 regulation.
One of the recommendations in the report is to limit the liability of individuals who hold tokens in decentralized autonomous organizations (DAOs). The report cites a recent U.S. ruling that ruled that any U.S. person who owns or previously owned DAO tokens would be liable for any violation of the laws that the DAO was committed to.
The report also recommends that the Financial Conduct Authority (FCA), the UK’s main financial regulator, relax its current Know Your Customer (KYC) approach to allow for the use of “alternative and innovative technologies” such as digital identities and blockchain analysis tools.
Experts say the UK should avoid disrupting self-hosted wallets and regulate proof-of-stake services as financial services. Other proposals include allowing private stablecoin issuers to hold stablecoin reserves at the Bank of England, creating a "tax wrapper" for cryptocurrency exchanges, and creating a new sandbox under the Department of Science, Innovation and Technology.
Recently, British regulators have taken stricter regulatory measures on the digital asset industry. The UK Treasury is considering banning all sales calls promoting cryptocurrency investments, and the FCA has warned local cryptocurrency businesses to comply with its marketing rules or face consequences.
C3 Tip: The views, thoughts and opinions expressed here are the author's own and do not contain investment advice or recommendations. Every investment and transaction involves risk.
There are three levels of investment: seeing, understanding, and holding. There are also three levels of entrepreneurship: thinking, doing, and completing. Each level seems to be not much different in terms of words, but in fact, there is a huge difference. Each level can eliminate more than 90% of people.