Britain’s cryptocurrency market, often likened to the Wild West, urgently requires regulation, advised lawmakers pressing the government for intervention to end volatile price swings, hacking vulnerabilities, and insufficient consumer protection.
The Parliament’s Treasury Committee issued a unanimous report highlighting the unsustainability of the UK’s ambiguous stance on cryptocurrency regulation. According to the committee, implementing proportionate regulations could, “improve customer outcomes, enable sustainable growth, and reduce certain risks,” potentially positioning Britain as a global leader in cryptocurrency markets.
Nicky Morgan, the committee’s chair, criticised the government’s inaction by stating, “It’s unsustainable for the government and regulators to bumble along issuing feeble warnings to potential investors, yet refrain from acting.” The committee referred to these digital assets as “crypto-assets” and underscored that investors currently face a multitude of risks without adequate protection. There are no formal mechanisms for consumer redress or compensation, leaving consumers unprotected as the government deliberates on regulation.
The report proposed that extending existing laws to cover cryptocurrency exchanges and initial coin offerings would swiftly grant regulators oversight of the industry. This recommendation was met with approval from CryptoUK, a self-regulatory trade association for the UK cryptocurrency sector. Its chair, Iqbal Gandham, urged the government to “introduce regulation that strikes the right balance between establishing safeguards and enabling the UK to become the global leader in crypto.”
Despite the existence of voluntary self-regulating bodies that set codes of conduct for the market, the report indicated these measures are insufficient as some firms may inevitably disregard them. Morgan added, “At a minimum, regulation should address consumer protection and anti-money laundering.” She further suggested that if the government decides to foster crypto-asset growth, appropriate and proportionate regulation could indeed see the UK emerge as a global centre for cryptocurrency activities.
The call for regulation is clear: Britain must act decisively to govern the cryptocurrency market and shield consumers from the myriad risks currently in place. Proper regulatory measures could transform the UK into a global hub for cryptocurrency, provided the balance between safeguarding and innovation is appropriately struck.