An influential body of UK lawmakers, the Cryptocurrency and Digital Assets All Parliamentary Group (APPG), has urgently called upon the government to expedite the implementation of comprehensive financial regulations for the crypto sector. To streamline the process, they have suggested the appointment of a specific overseer for the task.
Demand for Speedy Crypto Regulation: An Urgency of the Time
Published Monday, the APPG’s comprehensive report underscores the reality that cryptocurrencies are here to stay. As such, immediate regulation is paramount. The committee, represented by various political factions and hailing from both Houses of Parliament, has devised 53 regulatory recommendations to reinforce the UK’s crypto framework.
This announcement arrives in the wake of a proposal by Prime Minister Rishi Sunak‘s government to incorporate cryptocurrency within the existing financial service regulations. Reacting positively, CryptoUK, an influential lobbying group associated with APPG, responded by urging the implementation of specific crypto regulations within the next year – an ambition echoed by the government.
Striving for Greater Control over Crypto Sector
Bills aimed at equipping lawmakers with expanded control over cryptocurrency are presently under parliamentary consideration. Among other benefits, these would aid law enforcement agencies in their efforts to seize and freeze crypto assets.
Crypto companies must register with the Financial Conduct Authority (FCA) to operate legally within the UK. “The rapid proliferation of cryptocurrency and digital assets makes the timing of this report crucial. It aims to protect consumers and ensure the UK’s leadership in this sector,” noted Lisa Cameron, chair of the APPG, in Monday’s press release.
Crypto Regulation: A Step towards UK’s Crypto Hub Ambition
Launched in August of the previous year, the APPG’s crypto inquiry is a follow-up to the government’s April announcement, in which then Finance Minister Sunak expressed the government’s ambition to establish the UK as a hub for cryptocurrency. The APPG solicited insights from crypto industry professionals, regulators, and the general public during the inquiry.
The report details lawmakers’ recommendations for the proposed government official’s role. It reviews current regulatory approaches by institutions such as the Bank of England, the Advertising Standards Authority, and the FCA.
Bridging the Gap: A Call for Comprehensive Crypto Oversight
There is a need for a unified and coordinated approach across all government departments and agencies impacted by the rise of cryptocurrencies, digital assets, and blockchain technologies. It details concerns from numerous crypto companies that have experienced “lengthy delays” or outright application rejections by the FCA, often without any clear explanation.
The lawmakers highlighted concerns about the regulators’ resource capacity to fulfill their crypto-related obligations. They also proposed the establishment of dedicated units within UK regulatory bodies for digital assets.
Forward-Thinking Recommendations for Regulation
The report’s other key recommendations include ensuring that stablecoins are underpinned by high-quality assets, ideally fiat currency, to enable their usage as a form of payment. It also urges the government to investigate the environmental implications of cryptocurrencies thoroughly.
The lawmakers emphasized the need for a new comprehensive tax framework for crypto and addressing issues like UK banks limiting interactions with crypto companies, risks to financial stability, and crypto-related economic crime. These recommendations aim to strengthen the UK’s position as a crypto-friendly nation while ensuring that consumer protection remains at the forefront.
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