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FCA Research Note: Cryptoasset Consumer Research 2020

02 July 2020

On 30 June 2020, the FCA published a research note on cryptoasset consumers which forms part of the FCA’s work alongside the Government and the Bank of England (“BoE”) to understand market size, consumer profiles and attitudes towards cryptoassets[1]. The three institutions had previously, in October 2018, published a joint report as part of a UK Domestic Taskforce on Cryptoassets ( the “Taskforce”) which identified three major risks of harm associated with cryptoassets – risk to market integrity, financial crime risk and risks to consumers. As well as the 2018 joint report, the FCA published further consumer research in March 2019. Whilst the results were informative, the current research note acknowledges that the consumer research conducted in March 2019 had limitations. The FCA’s latest research note relates generally to unregulated transferable cryptoasset tokens, including the well-known tokens such as Bitcoin, Ether and XRP. The FCA intends to build on previous work in a more beneficial way by using a larger sample of cryptoasset owners and a longer survey. What are cryptoassets? The FCA defines cryptoassets as ‘cryptographically secured digital representations of value or contractual rights that use some type of distributed ledger technology and can be transferred, stored or traded electronically’ or more simply put by the BoE ‘a type of electronic cash’. Of course, cryptoassets are not like the cash we carry, they exist electronically and use a peer-to-peer system with no central bank or government managing the system. Cryptoassets are associated with significant risks but also offer substantial upside gain, for example a greater ...

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