As published on accountancydaily.co, Friday 5 August, 2022.
A cross-party group of MPs have set up an inquiry into the cryptoasset industry to assess whether existing regulations are fit for purpose
The All Party Parliamentary Group (APPG) for the UK crypto and digital assets sector will investigate the UK’s growing cryptoasset industry.
The cross-party group, chaired by Dr Lisa Cameron MP, is made up of MPs and Lords from across the main political parties and represents a broad range of interests and expertise in financial services, digital and technology.
The short inquiry will focus on key policy issues in relation to the UK crypto and digital asset sector. As part of its inquiry the APPG is inviting views from across the sector and has said it wants to hear from crypto operators, regulators, industry experts and government on the need for regulation of the sector.
The inquiry will focus on a range of key areas including the UK’s current approach to regulation of crypto and digital assets and the government’s plans to make the UK the global home of crypto investment; the role and current approach of UK regulators including the Bank of England, the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA) in relation to crypto and digital assets; the potential of central bank digital currencies; and potential risks in terms of consumer protection and economic crime.
The group will also be holding a number of evidence sessions over the coming months which will hear from key stakeholders.
The APPG inquiry comes at a time of increased scrutiny of the UK crypto and digital asset sector. The Treasury announced plans earlier this year to make the UK the global home of crypto investment, seeking to attract crypto firms to the UK and to boost the UK’s technology and fintech sector, creating jobs and boosting skills and talent.
Research from HMRC in July 2022 also showed that 10% of UK adults said they hold or have held a cryptoasset. That figure is up from 5.7% in January 2021, based on FCA data.
Lisa Cameron MP, chair of the Crypto and Digital Assets APPG, said: ‘The UK crypto sector has seen increased interest from consumers and regulators as the number of people who now own some form of cryptocurrency or digital asset has grown in recent years.
‘We are at a crucial time for the sector as global policy makers are also now reviewing their approach to crypto and how it should be regulated. As part of its inquiry the APPG will investigate the state of the UK crypto sector and recent concerns raised around financial crime and advertising.
‘It will consider the growth of crypto over recent years and the need for regulators and government to keep pace with the rapid advancements in innovation and technology, as well as considering whether enough is being done in terms of consumer protection.
‘It's vital that the UK does not take its foot off the gas and that government and regulators keep to their commitments when it comes to crypto and digital assets.’
CryptoUK, the UK’s independent trade association which represents over 100 members from across the crypto sector, welcomed the inquiry.
Ian Taylor, executive director of CryptoUK, said: ‘We are pleased that policymakers are waking up to the huge potential for the UK in terms of economic growth, jobs and skills from a properly regulated crypto and digital asset sector. The government has said it wants the UK to be the global home for crypto investment and the focus now must be on how the UK can deliver on this commitment.
‘The UK crypto sector recognises the importance of a well regulated industry in the UK and supports regulation which provides business certainty and encourages a healthy and robust market. We want to see a proportionate approach to regulation that balances the need for consumer protection with the need to support innovation and growth.’
The closing date for written submissions is 5 September 2022.