'Increased' interest in crypto sparks UK Parliamentary group inquiry

By Stephan Roth on Thursday 4 August 2022

Alternative LendingDigital BankingCrypto

The UK wants to become the global home of crypto.

'Increased' interest in crypto sparks UK Parliamentary group inquiry
Image source: LisaCameron/ChrisMcAndrew/CC BY 3.0.

The Crypto and Digital Assets All Party Parliamentary Group (APPG), has announced that it is looking to undertake an inquiry into the UK's crypto sector. 

The inquiry will assess the UK's current crypto and digital asset regulatory framework, the role to be played by regulators, the use case for central bank digital currencies and the Government's plans to turn the UK into the "global home" of crypto investments. 

Following the inquiry, the APPG will produce a report, sharing its key findings with Government and with the Treasury Select Committee in Parliament. 

Lisa Cameron MP, chair of the crypto and digital assets APPG, said the decision to conduct the inquiry comes as "increased interest from consumers and regulators…has grown in recent years". 

At present, one-in-ten British citizens hold crypto, and according to a report from Chainalysis, the UK ranks first for crypto activity across Europe. 

The UK doubles down on crypto

APPG's inquiry comes a month following the unveiling of the Financial Services and Markets Bill (FSMB), which aims to bring stablecoins into the remit of UK regulators.

At the time, the newly appointed Chancellor of the Exchequer Nadhim Zahawi said that the FSMB intended to make the UK the "leading centre" for technology.

Cameron has echoed this sentiment by insisting that the UK "does not take its foot off the gas" amid a global "review" of crypto regulatory frameworks is underway. 

Now "global policymakers are also now reviewing their approach to crypto and how it should be regulated," making it "vital" that the UK remains at the forefront of the discussion. 

Central to both the APPG's inquiry and the FSMB is the bringing together of Britain's regulatory bodies.  

Under the FSMB, the HM Treasury has been granted powers to introduce regulations, however, it must consult with the FCA and Bank of England before adding new regulations. 

One of the major issues for crypto innovation in the UK has been the stringent licensing regulation upheld by the FCA. 

The current AML/CTF laws in the UK have meant that only 13 per cent of the 273 crypto service providers have been granted a license to conduct operations.  Such hurdles have cost the UK, with crypto exchange Binance options to move to Dublin as opposed to London. 

Despite welcoming the APPG announcement, Ian Taylor, the executive director of CryptoUK has said that  "the focus now must be on how the UK can deliver on this commitment". 

The APPG is currently inviting inputs from interested parties across the industry, with the deadline for written submissions ending on 5 September. 

Members of the APPG cross-party group include Lisa Cameron MP, former Digital Minister Lord Vaizey, member of the Treasury Select Committee Harriet Baldwin MP and former Secretary of State Matt Hancock MP.

 

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