FCA published the document to provide clarity of regulation for the participants of the market who are carrying out the activity connected with cryptocurrencies. It is made to prepare the base for future laws on regulation of the crypto industry.
As crypto assets significantly differ by the rights which they grant to the owners and also on the actual and potential use, in Great Britain cryptocurrency assets into three types depending on options of their use:
- Exchange tokens which more often are called cryptocurrencies. This incorporates the bitcoin, litecoin, air, etc. belong. They are not given and are not supported by any central authority and are intended for use as means of exchange. Usually they represent the decentralized tool for purchase and sale of goods and services without traditional intermediaries, such as central or commercial banks;
- Security tokens. They represent investments within the law Financial Services and Markets Act within the second EU directive MiFID II. These tokens can grant the right for a part from profit or any other property rights;
- Utility tokens are used as access to specified platforms and grant the right to use services or goods. At defined conditions these tokens can turn into digital money.
It is very similar to what was made in Switzerland where almost the same classification of crypto assets was adopted.
Though crypto assets can be also used as means of exchange similarly to traditional fiat currencies, now they are not recognized as lawful means of payment in Great Britain and are not considered as currency or money.