The
Financial Conduct Authority (FCA) has significantly expanded its cryptocurrency
workforce to over 100 staff members, yet its policy team remains understaffed,
according to data obtained by blockchain finance provider Quant through a
Freedom of Information request.
The FCA now
employs 109 staff dedicated to crypto assets, a huge increase from just 9 in
2019. However, only 18 of these employees work in the policy department,
responsible for drafting and implementing market regulations.
The data
reveals that most of the FCA’s crypto workforce is split between authorization
(31 staff) and supervision (31 staff), focusing on granting regulatory
permissions and monitoring compliance respectively. The policy team, while
growing from 11 members in 2023 to 18 in 2024, still lags behind other
departments.
Gilbert Verdian, Founder and CEO of Quant
“There
is now widespread recognition that the unregulated crypto experiment has
failed,” said Gilbert Verdian, Founder and CEO of Quant. “But digital
assets and tokenization improve many areas within financial services, the issue
is that the UK lacks a body which can drive forward responsible and innovative
regulation to govern all of this.”
The
findings come as the new Labour government has pledged to “streamline the
regulatory rulebook” under its Plan for Financial Services. This
commitment puts pressure on the government to provide clearer regulatory
guidance for the crypto sector or risk losing firms to other jurisdictions.
“Properly
regulated crypto assets have the potential to transform our economy and the
financial services sector,” Tulip Siddiq, the new City Minister,
previously commented. Quant argues, however, that if only 18 employees are
responsible for creating cryptocurrency regulations, the UK could face a
“crypto catastrophe.”
FCA Needs “Digital Finance
Agency”
Notably,
the data also highlights a significant resource gap in crypto asset wholesale
policy, with only 9 employees in this crucial area. This shortage could pose
challenges to Labour’s stated goal of “embracing securities tokenization
and a central bank digital currency.”
Verdian
suggests a potential solution: “A separate ‘Digital Finance Agency’
dedicated entirely to digital assets can help the UK stay ahead of the pack
when it comes to the future of finance.”
“Digital
assets can bring major efficiency benefits to wholesale financial markets and
to realise this potential at scale, we need a new regulatory approach,” Quant’s
CEO concluded.
The FCA
emphasized that beyond its dedicated crypto teams, it employs specialists
across the organization who work on crypto assets alongside other sectors.
In
February, the UK government announced its intention to implement the
much-anticipated cryptocurrency regulations over the coming six months.
Subsequently, in April, Economic Secretary Bim Afolami predicted that these
regulations would be introduced by June or July. However, the industry is still
awaiting their implementation. This development follows the passing of the
Financial Services and Markets Act in June 2023, which classified
cryptocurrencies as regulated financial activities.
The
Financial Conduct Authority (FCA) has significantly expanded its cryptocurrency
workforce to over 100 staff members, yet its policy team remains understaffed,
according to data obtained by blockchain finance provider Quant through a
Freedom of Information request.
The FCA now
employs 109 staff dedicated to crypto assets, a huge increase from just 9 in
2019. However, only 18 of these employees work in the policy department,
responsible for drafting and implementing market regulations.
The data
reveals that most of the FCA’s crypto workforce is split between authorization
(31 staff) and supervision (31 staff), focusing on granting regulatory
permissions and monitoring compliance respectively. The policy team, while
growing from 11 members in 2023 to 18 in 2024, still lags behind other
departments.
Gilbert Verdian, Founder and CEO of Quant
“There
is now widespread recognition that the unregulated crypto experiment has
failed,” said Gilbert Verdian, Founder and CEO of Quant. “But digital
assets and tokenization improve many areas within financial services, the issue
is that the UK lacks a body which can drive forward responsible and innovative
regulation to govern all of this.”
The
findings come as the new Labour government has pledged to “streamline the
regulatory rulebook” under its Plan for Financial Services. This
commitment puts pressure on the government to provide clearer regulatory
guidance for the crypto sector or risk losing firms to other jurisdictions.
“Properly
regulated crypto assets have the potential to transform our economy and the
financial services sector,” Tulip Siddiq, the new City Minister,
previously commented. Quant argues, however, that if only 18 employees are
responsible for creating cryptocurrency regulations, the UK could face a
“crypto catastrophe.”
FCA Needs “Digital Finance
Agency”
Notably,
the data also highlights a significant resource gap in crypto asset wholesale
policy, with only 9 employees in this crucial area. This shortage could pose
challenges to Labour’s stated goal of “embracing securities tokenization
and a central bank digital currency.”
Verdian
suggests a potential solution: “A separate ‘Digital Finance Agency’
dedicated entirely to digital assets can help the UK stay ahead of the pack
when it comes to the future of finance.”
“Digital
assets can bring major efficiency benefits to wholesale financial markets and
to realise this potential at scale, we need a new regulatory approach,” Quant’s
CEO concluded.
The FCA
emphasized that beyond its dedicated crypto teams, it employs specialists
across the organization who work on crypto assets alongside other sectors.
In
February, the UK government announced its intention to implement the
much-anticipated cryptocurrency regulations over the coming six months.
Subsequently, in April, Economic Secretary Bim Afolami predicted that these
regulations would be introduced by June or July. However, the industry is still
awaiting their implementation. This development follows the passing of the
Financial Services and Markets Act in June 2023, which classified
cryptocurrencies as regulated financial activities.
