After conducting a thorough 10-month inquiry, a bipartisan group of Members of Parliament (MPs) and Lords in the UK Parliament has called for immediate regulation of the cryptocurrency sector and the appointment of a 'Crypto Tsar' to coordinate the government's approach.
The All Party Parliamentary Group (APPG) has put forth 53 recommendations across various crucial areas, cautioning that the UK has a limited timeframe of 12-18 months to establish early leadership in cryptocurrency regulation.
The report examines the roles and existing approaches of UK regulators such as the Bank of England, the Financial Conduct Authority (FCA), and the Advertising Standards Authority (ASA). It explores the potential offered by Central Bank Digital Currencies while addressing risks related to consumer protection and economic crime.
According to the lawmakers, the best course of action is to regulate cryptocurrencies and digital assets within both current and new financial services regulations. However, they express "significant concerns" regarding whether regulators presently possess the necessary resources, capacity, and technical expertise to fulfill their responsibilities. The APPG report recommends that all UK regulators involved in this sector should establish dedicated units with adequate resources specifically for cryptocurrencies and digital assets.
To ensure a cohesive approach across all policy domains, the government is also advised to consider appointing a 'Crypto Tsar' who can facilitate coordination among departments and ensure consistency.
These recommendations sharply contrast with a recent report from the Treasury Select Committee of the government, which raised doubts about the government's plans to regulate consumer crypto trading as a financial service. The committee argued that such regulation would create a misleading perception of safety and protection among consumers when, in fact, it is not guaranteed. Instead, they suggested subjecting the sector to existing gambling regulations.
The APPG report has been more positively received than the Treasury Committee's stance by CryptoUK, a trade body representing the industry. Ian Taylor, a board advisor at CryptoUK, stated, "We have consistently advocated for close collaboration with the government to foster industry growth within a regulatory framework that promotes innovation and does not stifle it. We believe the recommendations presented in this report will facilitate greater engagement and cross-governmental dialogue, further educating and informing policymakers about the critical issues faced by our members."
