Crypto exchange Binance and stablecoin issuer Circle submitted feedback to the UK government as the country considers a new framework to govern both trading and lending of digital assets.

Binance, by far the largest exchange in the world in terms of volume, said that special attention needed to be paid to consumer protection, market integrity and financial stability. It warned, however, that disproportionate regulation could "inadvertently stifle innovation and growth, remove choice and competition, and potentially drive consumers to unregulated markets or operators."

"Achieving this balance is not easy," the company wrote in a letter to the country's Treasury, which had solicited input in February after unveiling an initial plan. 

While disclosure requirements should "provide the right information to consumers," Binance said it questioned whether trading venues can "take on the responsibilities of the issuer in a traditional sense" when there is no issuer. It also said that decentralized finance needs to be "carefully defined," with differences considered and accommodated in the drafting of new rules. 

(by Nathan Crooks)