Following the UK government’s plans to become a global hub for digital assets, lawmakers have called for comprehensive crypto regulations. The Crypto and Digital Assets APPG urged the UK government to provide clear regulatory frameworks for digital assets within the next 12-18 months.
In a June 5 publication, the Crypto and Digital Assets All Party Parliamentary Group (APPG) launched an inquiry to identify key elements of digital assets policy development and challenges surrounding the regulation of the evolving asset class.
A Call For Crypto-Dedicated Regulation In The UK
The Crypto and Digital Assets APPG provides a forum for parliamentarians, politicians, regulators, government, and industry to brainstorm challenges and opportunities in the crypto sector. It also provides a platform to discuss the importance of future crypto industry regulation.
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In the June 5 report, the group wrote down 53 recommendations for crypto regulation in the UK. This development comes amid the just concluded consultation by Prime Minister Sunak’s administration. The consultation proposed a crypto regulatory treatment with the same laws as traditional financial services.
However, the Crypto and Digital Assets APPG want the government to provide a dedicated regulatory framework and platform for the crypto sector.
The APPG also commended the UK government’s proactive steps alongside the Bank of England to explore the potential of CBDCs (digital pound). It urged the government to ensure sufficient and appropriate education and public awareness of digital pounds.
Furthermore, the group noted that UK regulators would be at the forefront of achieving the government’s vision for cryptocurrency and digital assets.
It, however, raised concerns regarding whether regulators have the resources, technical expertise, and capacity to discharge these duties. As such, the group recommended a coordinated approach across departments and agencies that could be affected by the growth of cryptocurrencies.
Furthermore, it suggested that government appoint a “Crypto Tsar” who would help coordinate across the departments. Responding to the consultation, an APPG-affiliated lobby group, CryptoUK, said the UK should lay out specific crypto regulations within the next 12 months.
Potential Risks Associated With Crypto
While the APPG supports crypto development, it urged the UK government to consider the potential risks of continued growth and popularity of the sector. Lawmakers noted the risks to financial instability, consumer protection, and economic crime associated with crypto and digital assets.
In a June 5 press release, the chairperson of the APPG, Lisa Cameron, said:
Given the rapid growth of cryptocurrency and digital assets, the timing of this report is vital to protect consumers while ensuring the UK’s leadership in this sector can be realized.
Meanwhile, the UK government has outlined plans to deliver a crypto regulatory framework in line with its vision to become a global digital assets hub. The parliament is already debating on bills to grant regulators oversight of crypto. Now, crypto services firms that intend to operate in the UK must register with the Financial Conduct Authority (FCA).
