UK financial authorities are striving to strike a balance in cryptocurrency regulation, combining the strengths of traditional finance (TradFi) and decentralized finance (DeFi). The Financial Conduct Authority (FCA) is exploring best practices to ensure market safety and legality, addressing concerns of over-regulation or insufficient regulation.

According to FCA's Matthew Long, the goal is to merge different approaches and identify the most effective outcome. Long emphasized the need to learn from traditional finance while adapting to the unique aspects of cryptocurrencies. He acknowledged that some issues may seem simple but prove complex, while others may face initial opposition but ultimately succeed.

The FCA is working to maintain a clean, safe, and thriving crypto industry by keeping good actors in and combating money laundering. The UK has become a significant player in the crypto economy, with the FCA approving 38 crypto firm registrations since 2020. The authority is enhancing its capabilities to detect and prevent crypto market misuse and illegal advertisements.

By combining the best of both worlds, UK financial authorities aim to create a robust and effective regulatory framework for cryptocurrencies like Bitcoin, promoting a healthy and legitimate market environment.