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UK votes to recognise cryptos as regulated financial instruments

By Darius McQuaid

Edited by Charlie Mellor

14:45, 26 October 2022

Exterior of House of Commons and the Palace of Westminster next to the River Thames
The Financial Services and Markets Bill broadly covers the UK’s post-Brexit economic strategy – Photo: Getty Images

The UK House of Commons has voted to recognise cryptos as regulated financial instruments as part of the line-by-line reading of a parliamentary Bill. 

Andrew Griffith, Financial Secretary to the Treasury and City Minister, introduced an amendment to the Financial Services and Markets Bill, reported CoinDesk.

Griffith’s amendment was to include crypto assets in the scope of regulated financial services in the UK. The amendment to the Bill, which covers the UK’s post-Brexit economic strategy, received the support of MPs who voted in favour of it. 

“The substance here is to treat them [crypto] like other forms of financial assets and not to prefer them, but also to bring them within the scope of regulation for the first time,” said Griffith. He added: 

“The [UK] Treasury will consult on its approach with industry and stakeholders ahead of using the powers to ensure the framework reflects the unique benefits and risks posed by crypto activities.”

The amendment could lead to the regulation of crypto companies that are legally authorised to operate in the UK. However, the Bill and its provisions have yet to be passed as UK law.

The Bill had already included provisions for extending existing regulation to payment-focused stablecoins. The amendment comes after Rishi Sunak, who advocated for the UK to become a global crypto asset hub when he was chancellor, rose to the position of Prime Minister this week.

Boost to the crypto market

Following the debate and vote on 25 October, the two leading cryptos have experienced a notable increase in price as of today (26 October).

DOGE/USD

0.12 Price
-1.410% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

BTC/USD

64,675.50 Price
-0.120% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

BCH/USD

380.00 Price
-2.110% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

ETH/USD

3,430.62 Price
-0.440% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

Bitcoin (BTC) has risen back above the $20,000 mark and was trading earlier at $20,822 after seeing an increase in price of 6.90% over the past 24 hours according to CoinMarketCap following this news.

BTC to USD

Before the amendment to the Bill was passed, BTC was sitting at around $19,000 level.

Ethereum (ETH) has also risen above the $1,500 mark to $1,570 for the first time since The Merge took place.

The Merge marked the transition of ETH from a proof-of-work (PoW) crypto to a proof-of-stake (PoS) coin.

Markets in this article

BTC/USD
Bitcoin / USD
64675.50 USD
-74.85 -0.120%
ETH/USD
Ethereum / USD
3430.62 USD
-15.21 -0.440%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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