In her speech, Mills talks about how recent innovations in digital assets and payments pose both opportunities and risks to the Bank in meeting its monetary and financial stability objectives. She highlights the Bank’s recent work on innovation, including its Discussion Paper on its approach to innovation in money and payments, the launch of our Digital Securities Sandbox, and experiments on wholesale payments.

Under the proposals, the existing e-money safeguarding regime will be replaced with a client assets (CASS) style regime designed to work with payments firms’ business models. It will also publish strengthened interim safeguarding rules for firms by the middle of next year.

The FCA’s cost benefit analysis (CBA) of its proposals has also been subject to review by the new independent CBA Panel.

Commenting on the proposals, FCA Director of Payments and Digital Assets Matthew Long said: 'We’re consulting on proposals to make safeguarding rules stronger and clearer for payment and e-money firms so customers get as much of their money back as quickly as possible if the firm goes out of business.'

Firms can respond to the FCA’s consultation by 17 December 2024. 

The bill confirms the existence of a third category of personal property into which digital holdings including cryptocurrency, non-fungible tokens and carbon credits could fall.

Previously, digital belongings were not definitively included in the scope of English and Welsh property law.

The new law will therefore "give legal protection to owners and companies against fraud and scams, while helping judges deal with cases where digital holdings are disputed or form part of settlements, for example in divorce cases."

The action being taken on digital assets is in response to the Law Commission’s report in 2023. The Ministry of Justice commissioned the report to identify any barriers to the recognition of digital assets as property under English and Welsh private law and to recommend solutions. 

The Bill has been introduced into the House of Lords under the special parliamentary procedure for Law Commission bills.

The Government also announced in a written statement that it accepts the recommendation to set up an expert group who can provide guidance on technical and legal issues relating to digital assets. The Ministry of Justice has asked the UK Jurisdiction Taskforce (UKJT), an expert group chaired by the Master of the Rolls that produces non-binding guidance on areas of legal uncertainty, to take forward this work.

See also the press release from the Law Commission regarding the new bill.

This review looked at how firms are implementing personalised risk warnings, the 24-hour cooling off period, client categorisation and appropriateness assessments.