The purpose of this law was to strengthen all financial systems, including cryptocurrencies. It proposed that private crypto transactions require the collection of information on recipients of £1,000 or more. People had expressed displeasure about this law on social media, which could be a reason for its change. Following the amendment, the law directs private crypto wallet providers to collect details of only transactions that appear suspicious. “Instead of collecting information related to all unhosted wallet transfers, crypto firms must only collect information about transactions suspected of being illegal,” the document said. Changes in this law may remove the displeasure of the people associated with the crypto segment.
The Block reported that the UK government introduced the law nearly a year ago to prevent money laundering and funding for terrorist activities. The UK wanted to ensure that all funds linked to crypto could be identified. Cryptocurrencies have recently been included in the official financial systems in the UK. Stablecoins such as Tether and Binance USD were approved as official means of payment in April. Stablecoins are cryptocurrencies that attempt to link their market price to a reserve asset such as gold or common currencies. These are more commonly used for digital transactions that involve converting virtual assets into real assets.
Apart from this, there is also a plan to create a financial market infrastructure called ‘Sandbox’ in the UK. This will give firms the ability to experiment and innovate in infrastructure related to crypto services. Some other measures to boost the crypto segment in the UK are also being considered.
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