The United Kingdom Financial Conduct Authority published a consultation paper on how crypto assets should be regulated. The document highlighted the possibility to oversight security tokens and determined stable coins.\r\n\r\nThe "Guidance on Cryptoassets" is now in open consultation until April 5, 2019. Then, a policy statement will be published in the summer of 2019.\r\n\r\nPreviously, the FCA worked on crypto assets as part of a crypto taskforce. Now, "this consultation paper is the next step in the FCA\u2019s work on crypto assets and sets out details on where different types of crypto assets might fall in the regulatory perimeter."\r\n\r\nThe crypto industry in the United Kingdom remains small and despite the "activity in the UK has grown in recent years," the paper highlights, "the number of firms carrying out crypto asset activities in the UK remains small and the overall size of the UK market represents a small percentage of the overall global crypto asset market."\r\n\r\nAs Christopher Woolard, executive director of Strategy and Competition at the FCA, said, "this is a small but growing market and we want both industry and consumers to be clear what is regulated, and what isn\u2019t. This is vital if consumers are to know what protections they will benefit from and in ensuring we have a market functioning as it should.\r\n\r\nThe paper categorised crypto assets into three types: Exchange tokens, Security tokens, and Utility tokens.\r\n\r\nWhile the Exchange tokens are not issued or controlled by any central authority, Securities are tokens that represent specified investments like a share or a debt instrument.\r\n\r\nExchange tokens do not fall under the FCA's framework as they are not recognised as legal tender in the United Kingdom.\r\n\r\nOn the other hand, Security tokens will be classified as investments assets as their nature and definition fall under the Financial Services and Markets Act 2000. "These products are also capable of being financial instruments under MiFID II."\r\n\r\nStablecoins can also fall under the security tokens framework as they are "backed by certain assets (which may include Specified Investments), a basket of crypto assets, or potentially through algorithms that maintain the supply of the token."\r\n\r\nUtility tokens grant holders access to services or expected products of the organisation, but they do not have rights over the issuer.