UK regulator knew community was against crypto derivatives ban back in 2019
UK regulator decided to ban crypto derivatives despite massive opposition to this position
Almost 97% of those interviewed by FCA expressed disagreement with the regulator’s proposal for the cryptocurrency market back in 2019
FCA believes that cryptocurrencies are still more of an add-on to fiat than a new means of payment
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The British regulator decided to ban cryptocurrency derivatives for individual investors, despite the initially skepticism from the crypto community
The UK Financial Conduct Authority (FCA) has decided to close access to cryptocurrency derivatives despite massive disagreement at the discussion stage. This is evidenced by the regulator’s report on the discussion of the ban on crypto derivatives..
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Consultations on a possible ban on cryptocurrency derivatives continued until October 2019. As noted in the report, 511 respondents out of 527 (almost 97%) expressed disagreement with the regulator’s proposal to ban cryptocurrency derivatives for individual investors.
In particular, the respondents stated that:
- cryptocurrencies have intrinsic value;
- individual investors ways to value cryptocurrencies;
- the ban is disproportionate, alternative measures may have achieved similar results;
- FCA benefit and cost analysis inaccurately reflects the effectiveness of the ban on cryptocurrency derivatives.
Despite the fact that FCA does not see the intrinsic value of cryptocurrencies, the community believes otherwise. An example of accepting cryptocurrencies as a means of payment at Starbucks and Microsoft through the American service Bakkt is given as an argument..
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The British regulator acknowledged that some companies accept cryptocurrencies as a means of payment, but such payments are immediately converted into traditional funds:
“In fact, fiat remains the main medium of exchange.”.
As a reminder, the FCA previously banned the sale of certain cryptocurrency derivatives to individual investors starting January 6, 2021. The British regulator believes that individual investors are unable to evaluate such products, and also do not understand the essence of cryptocurrencies.
FCA’s skeptical position on the cryptocurrency market has been observed for a long time. For example, back in 2018, the regulator found out that the desire to get rich quickly combined with the loss of profit syndrome were key factors for buying cryptocurrencies..
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