March 07, 2019

FCA published results of the research on UK consumer attitudes to, and awareness of, crypto-assets, such as Bitcoin and Ether, in the UK. The research includes a national survey and qualitative interviews with UK consumers. Out of the pieces of the published research, one report by the research firm Revealing Reality explores the attitudes, understanding, and motivations behind the consumer decisions to purchase and use different crypto-assets. The second report is by the research firm Kantar TNS and it looks at the consumer awareness, understanding, and purchasing habits related to crypto-assets.

The qualitative research indicated some potential harm, including that many consumers may not fully understand what they are purchasing. However, despite the general poor understanding of crypto assets among UK consumers, findings from the survey suggest that the overall scale of harm may not be as high as previously thought. Seventy-three percent of the surveyed UK consumers do not know what a crypto currency is or are unable to define it. FCA estimates that only 3% of consumers surveyed had ever bought crypto-assets. 

FCA has previously warned that cryptoassets, including Bitcoin, are highly volatile and risky. Many tokens (including Bitcoin and "cryptocurrency" equivalents) are not currently regulated in the UK. This means that the transfer, purchase, and sale of such tokens currently fall outside the regulatory remit. Thus, it is unlikely that consumers will be entitled to register complaints with the Financial Ombudsman Service or protected by the Financial Services Compensation Scheme, if things go wrong. FCA is working with the Government and BoE, as part of a UK Cryptoassets Taskforce, to understand and address the harms from crypto-assets and encourage innovation in the interests of consumers. FCA is also consulting on the guidance to clarify the types of crypto-assets that fall within the existing regulatory perimeter. Later this year, FCA is expected to consult on banning the sale of certain crypto-asset derivatives to retail investors. HM Treasury is also exploring legislative change to potentially broaden the regulatory remit of FCA to bring in further types of crypto-assets.

 

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Keywords: Europe, UK, Banking, Securities, Crypto-Assets, Regtech, Consumer Research, Distributed Ledger Technology, FCA

 

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