May 1, 2023

Polygon Labs’ Response to the UK’s Cryptoasset Consultation & Call for Evidence

Back in February, the UK's HM Treasury – the arm of the UK government that sets financial regulations – sought responses to the Consultation & Call for Evidence on a future regulatory regime for #cryptoassets. HM Treasury's approach as set forth in the Consultation underscores the seriousness of the UK government’s claim that it intends to become a "global cryptoasset technology hub", a mantra that has been repeated by key members of the UK government for over a year.

Polygon Labs has submitted a response, which you can download and read the response here.

HM Treasury’s Consultation itself is a comprehensive, thoughtful proposal setting forth a robust regulatory regime for the cryptoasset industry, borne from study and understanding of the cryptoasset ecosystem as well as from deep engagement with industry. The Consultation proposes to focus its first stages on centralized or custodial cryptoasset intermediaries (“CeFi”) and token issuers, akin to the EU's approach in the Markets in Cryptoassets regulation (“MiCA”), which was enacted recently. The Call for Evidence asks for input regarding novel applications of blockchain technology such as decentralized finance, mining & validation and sustainability.

Understanding that CeFi may be the majority of those submitting responses, Polygon Labs focused on many of the issues raised in the Call for Evidence, providing detailed explanations relating to DeFi, proposed ways to “measure” “decentralization”, NFTs and other types of "decentralized" tokens, validation and sustainability.

We are incredibly encouraged to see global regulators like HM Treasury engaging in deliberate regulation for the cryptoasset industry in ways that will both achieve traditional policy goals of protecting consumers, preserving market integrity and combating illicit finance while also fostering innovation. ‍

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