UK government backs more cryptocurrencies regulation following “Wild West” claims

Christian MacLeod

The British government says that it is prepared to bestow full cryptocurrency regulation rights on to the Financial Conduct Authority (FCA) after a group of Members of Parliament claimed that the cryptocurrency sphere looked like the “Wild West” in terms of consumer protection.

In a report from the Treasury Select Committee, MPs claimed that “problems include volatile prices, hacking vulnerabilities, minimal consumer protection, and anonymity aiding money laundering” all existed.

At the moment, only a handful of blockchain-related cryptocurrencies are overseen by the FCA. Bitcoin, as well as some other high profile ones, are not.

Regulation, the report claimed, could have a real positive impact for investors. Under the plans, traders who feel they have been subject to crypto fraud would find it easier to have their problems solved through a centralised system with a clear pathway.

“Regulation could improve customer outcomes, enable sustainable growth, and reduce certain risks”, it said.

“In deciding the regulatory approach, Government should decide if growth should be encouraged. Proportionate regulation could see UK as well placed to become [a] global centre for crypto-assets”, it added.

It pointed out that there was currently a lack of widespread understanding as to who was responsible for regulating what in the crypto sector – and that this could not last.

“The ambiguity of the UK Government and regulators’ position is clearly not sustainable”, it said.

However, the report did look at some positives. It touched, for example, on the role of blockchain mines, and attempted to see some positive potential value.

“Blockchain is currently slow, costly and energy-intensive, but there is potential for data storage uses”, it wrote.

The Treasury Select Committee is made up of a group of MPs drawn from various political parties.

Its role is to oversee the policy, spending and overall running of various finance-related government organisations, such as the FCA.

According to Nicky Morgan, who is Chair of the committee, there was broad agreement between the government, the FCA and the committee on how to proceed.

“The Treasury Committee would like to thank the Economic Secretary and Chief Executive of the FCA for providing evidence to the Committee’s inquiry, and for taking the time to respond to the report”, Morgan said.

“It is clear that the Government and the FCA share the Committee’s concerns on crypto-assets, including the lack of regulation, minimal consumer protection, and anonymity aiding money laundering.”

“The decision by the Government and the FCA to hold a series of consultations about how to mitigate these risks is welcome. The Committee will keep a close eye on these consultations and will continue to press for regulation”, she added.

In response, Government Minister John Glen, Minister for the City and the Economic Secretary to the Treasury, said that a government consultation was now on the way.

“The government will consult early next year to explore whether other crypto-assets that have comparable features to specified investments but that fall outside the current perimeter should be captured in regulation”, he said.


Christian MacLeod

Latest news

AUD/USD Pair Dips 0.45% in Markets, COVID Panic Grips
The US dollar continued a week of surges in lots of its key pairs after the coronavirus pandemic placed itself firmly back on the agenda. Read more
EUR/GBP Eyeing 0.9282 Level on the Forex Price Charts
The pair containing the single European currency and the British pound has been closely watched in recent weeks. Read more

Safest Forest Brokers 2020

Broker Info Best In Customer Satisfaction Score
#1 ForexTime LogoYour capital is at risk Founded: 2012 Global CFD and FX broker
Number One Broker
Best FOREX BROKER Visit broker
5
#2 Your capital is at risk Founded: 2012 Global Forex Broker
Number One Broker
Best Trading App Visit broker
5
#3 Forex Broker Pepperstone LogoYour capital is at risk Founded: 2010 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
4.9
#4 Your capital is at risk Founded: 2006 Globally regulated broker
Number One Broker
BEST CUSTOMER SUPPORT Visit broker
4.9
#5 BlackBull MarketsYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker
4.8

    Forex Fraud Certified Brokers

    Exness Small Logo
    BlackBull Markets Small Logo
    Oanda Small Logo
    OctaFX Logo
    IQ Option Logo
    Pepperstone
    Forex.com Logo
    FXTM Logo
    ATFX Logo
    XM Logo
    City Index Logo
    Oinvest Small Logo
    LegacyFX Small Logo
    Plus500 Small Logo
    VantageFX Small Logo
    HYCM Logo
    skilling logo