Circle Internet Financial
Circle Internet Financial Logo

Sep 19, 2024

August 15, 2022

Circle Submits Response to UK HM Treasury’s FMI SAR Consultation

what you’ll learn

Circle reiterated its continued commitment to responsible digital asset regulation and oversight framework in response to UK’s HM Treasury

Circle Submits Response to UK HM Treasury’s FMI SAR Consultation

On 29 July 2022, Circle responded to a consultation issued by the UK’s HM Treasury regarding the Government’s proposed application of the Financial Market Infrastructure Special Administration Regime (FMI SAR) to systemic digital settlement asset (including stablecoin) firms. In its response, Circle reiterated its continued commitment to responsible digital asset regulation, and encouraged HM Treasury to establish a bespoke regulatory and oversight framework for systemic digital settlement asset firms, and for fully-reserved digital currency issuers to be subject to sound prudential regulation. Circle affirmed the need for greater clarity in determining a “systemic” designation for digital settlement asset firms, and questioned whether the FMI SAR was the appropriate regime for these firms given the existence of payments and e-money special administration regimes in the UK. Circle encouraged HM Treasury to thoroughly evaluate the differences between blockchain-based payment systems and traditional inter-bank payment systems prior to establishing a regulatory regime for digital settlement asset firms which may be ill-fitting.  

Additionally, Circle discussed the differences in its operational model and risk profile from that of a traditional financial market infrastructure (“FMI”) firm, for which the FMI SAR was originally developed and intended. Given these differences, and given the complexity of the digital settlement asset ecosystem, Circle wrote in support of developing novel supervisory frameworks that would appropriately recognize the diversity of digital settlement asset firms, their operations, and sufficiently regulate those firms.

Related posts

Now is the time to get US stablecoin legislation right

Now is the time to get US stablecoin legislation right

March 21, 2025
The State of the USDC Economy 2025: Insights from Industry Leaders

The State of the USDC Economy 2025: Insights from Industry Leaders

March 19, 2025
Circle's response to Brazilian Central Bank's RFCs 109 and 111 to regulate VASPs activity

Circle's response to Brazilian Central Bank's RFCs 109 and 111 to regulate VASPs activity

March 10, 2025
Blog
Circle Submits Response to UK HM Treasury’s FMI SAR Consultation
circle-submits-response-to-uk-hm-treasurys-fmi-sar-consultation
August 15, 2022
Circle reiterated its continued commitment to responsible digital asset regulation and oversight framework in response to UK’s HM Treasury
Company
Policy