A cross-party group of MPs has made recommendations on the government’s approach to regulating the crypto industry and warned that the UK has less than 18 months to get it right if it wants to take an early lead in global crypto regulation.
The All Party Parliamentary Group (APPG) for Crypto and Digital Assets Group also concluded that the cryptocurrency and digital asset sectors “present considerable risks” without “comprehensive regulation”.
The report, Realising government’s vision for the UK to become a global hub for cryptocurrency & fintech innovation, made a total of 53 recommendations in areas such as UK’s approach to regulation of cryptocurrency, the role and current approach of UK regulators, the potential offered by Central Bank Digital Currencies and risks to consumer protection and economic crime.
The report also said that interest in digital assets among investors and the general public led to the conclusion that cryptocurrency is more than a fad and is here to stay, and that cross-government planning is required if the UK wants to take the opportunities it offers.
These recommendations followed contributions from the crypto sector regulators, industry experts and the general public.
The report said: “Other countries around the world are moving quickly to develop clear regulatory frameworks for cryptocurrency and digital assets. The UK must move within a finite window of opportunity within the next 12-18 months to ensure early leadership within this sector.”
Scottish Nationalist Party MP and chair of the APPG, Lisa Cameron MP, said: “This is the first report of its kind compiled jointly involving Members of Parliament and the House of Lords and we are keen that it contributes to evidence-based policy development across the sector.
“The Crypto and Digital Assets All Party Parliamentary Group was formed in response to growing interest and scrutiny of the sector in Parliament and exists to help policymakers better understand the ever evolving world of cryptocurrency and digital assets and explore the urgent need for UK regulation.”
The APPG began its inquiry after the Government’s announced its vision for the UK to become a global hub for cryptocurrency.
Ian Taylor, board adviser at CryptoUK, the trade body for the UK crypto industry, welcomed the report, which he described as “balanced” and “considered”.
“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,” he said.
“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.”
Taylor added: “The report recognises the significant growth of the sector in the UK and the tremendous opportunity it presents for the country’s economy and reputation as a leader in financial innovation.
“It also emphasises the need for the government and regulators to define a clear, proportionate and bespoke regulatory framework to enable blockchain businesses to operate effectively, foster innovation and protect consumers.”