UK Law and Practice Contributed by: James Burnie, Kathryn Dodds, Olga Antonova and Holly Joseph, gunnercooke llp
In the future, however, there is likely to be a move to regulate stablecoins used for payment ser - vices. A core focus here is that companies using stablecoins for payments may be providing a service analogous to traditional payment ser - vices without being subject to regulation. Given this is the case, the proposed new regime will very likely be heavily influenced by the existing approach to regulating payment services. How - ever, there will be differences – for example for stablecoins there will likely be provisions regard - ing ensuring that they have suitable liquidity and that issuers are able to clearly articulate how the stability of the crypto-asset’s value is ensured. 10.12Non-Fungible Tokens (NFTs) Please see 10.3 Classification of Blockchain Assets regarding the regulation of crypto-assets generally. It should be noted that, in the experi - ence of the authors, NFT projects are generally structured so as not to involve the selling of an unregulated token. As such, if they are sold into the UK from a jurisdiction outside of the UK they are generally outside of the financial promotion restriction as well as the other parts of the UK regulatory framework. It is therefore relatively uncommon for such platforms to be set up in the UK, as it is generally cheaper to sell into the UK on a cross-border basis.
service providers (AISPs), payment initiation ser - vice providers (PISPs) and card-based payment instrument issuers (CBPIIs) to the UK. 11.2 Concerns Raised by Open Banking There are clear rules and requirements gov - erning the protection of data privacy and data security in the UK, and these are complied with by participants in the ecosystem. This has facili - tated banks and technology providers in ena - bling open banking, as they are clear as to their obligations. The concept of fraud is broader than just finan - cial services and fintech, and is a general offence in the UK. The Fraud Act 2006 sets out the definition of fraud and defines it broadly in terms of the fol - lowing. • Fraud by false representation: a person com - mits this offence if he: (a) dishonestly makes a false representation; and (b) intends, by making the representation to make a gain for himself or another, or to cause loss to another or to expose another to a risk of loss. • Fraud by failing to disclose information: a person commits this offence if he: 12. Fraud 12.1 Elements of Fraud (a) dishonestly fails to disclose to another person information which he is under a legal duty to disclose; and (b) intends, by failing to disclose the informa - tion to make a gain for himself or another, or to cause loss to another or to expose another to a risk of loss.
11. Open Banking 11.1 Regulation of Open Banking
Whilst the United Kingdom is outside of the EU, the Payment Services Directive (PSD2) has been implemented in the UK. UK banks have been instructed to support open banking, and this has led to a plethora of new payment service firms operating in the UK. In this respect, it is worth noting that in the wake of PSD2 there has been a focus on attracting new account information
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