A cross party group of MPs and Lords in the UK Parliament has called for urgent regulation of the cryptocurrency sector and the appointment of a 'Crypto Tsar' to coordinate the Government's approach.
Following a 10-month inquiry, the Aall Party Parliamentary Group (APPG) has made a total of 53 recommendations on a number of key areas, warning that the UK has a finite window of 12-18 months to ensure early leadership on cryptocurrency regulation.
The report looks into the the role and current approach of UK regulators including the Bank of England, the FCA and the ASA, the potential offered by Central Bank Digital Currencies and the risks faced in terms of consumer protection and economic crime.
The lawmakers contend that cryptocurrency and digital assets are best regulated within existing and new financial services regulations, but state "significant concerns" about whether regulators currently have the resources, capacity and technical expertise required to deliver on their responsibilities. The APPG recommends that all UK regulators related to the sector should have dedicated and properly resourced cryptocurrency and digital assets units, states the report.
To ensure a coordinated approach across all policy areas, the Government should also consider the appointment of a ‘Crypto Tsar’ who can help coordinate across departments to ensure a consistent approach.
The recommenation stand in stark contrast to a recent report by the Government's Treasury Select Committee, which questioned Government plans to regulate consumer crypto trading as a financial service, arguing that this will create a ‘halo’ effect, leading consumers to believe this activity is safe and protected, when it is not. Instead it suggested that the sector should be subject to extant gambling rules.
The APPG report has recieved a warmer welcome than the treasury Committee's views by trade body CryptoUK. Ian Taylor, board advisor at CryptoUK, comments: “We have continued to strongly advocate for the need to be working alongside the government in ensuring that the industry has the opportunity to grow within a regulatory framework that allows the development of new technology and does not restrict or stifle innovation. We believe the recommendations from this report will allow for more engagement and cross-governmental dialogue to continue to educate and inform policymakers on the critical issues our members face."