Cryptocurrency self-regulatory industry body CryptoUK has given evidence to a Treasury Select Committee and warned the UK government it must regulate the sector or risk missing out “on the biggest technology since the internet.”
Yesterday, June 20th, 2018, CryptoUK chairperson and UK managing director of investment platform eToro, Iqbal V. Gandham warned UK politicians that the UK risks missing out on the global cryptocurrency economy if it fails to bring the sector within the remit of financial services regulation.
CryptoUK, consisting of BlockEx, CEX.IO, Coinbase, Coinshares, Coinfloor, CommerceBlock, CryptoCompare and eToro, believe that regulating cryptocurrency exchanges under financial services rules will benefit consumers and cryptocurrency innovators.
Gandham called on the Treasury Select Committee and UK government to take a “straightforward, light-touch” approach to regulation by bringing cryptocurrency exchanges under the remit of the Financial Services and Markets Act.
“Regulating the point where cash is converted to crypto and vice versa is a simple solution to the serious concerns currently tarnishing this technology,” said Gandham. “It offers a clear means to tackling illegal activity and protecting consumers, whilst enabling the best of this industry to flourish.”
Gandham, like CryptoUK, thinks the UK government needs to act quickly, as without regulation the UK could fall behind the rest of the world when it comes to cryptocurrency and blockchain technology.
“We made this mistake to our cost 25 years ago with the rise of the internet – the UK economy cannot afford to do so again. Regulatory certainty is crucial to promoting innovation for the future.”
CryptoUK previously issued a written response to the Treasury Select Committee’s inquiry into digital currencies which began in February 2018. MPs are examining the role of cryptocurrencies in the UK including the risks to consumers, businesses and the government. The committee will also look at the benefits of cryptocurrencies and blockchain technology including how they could create opportunities for the UK economy.
“Striking the right balance between regulating digital currencies to provide adequate protection for consumers and businesses, whilst not stifling innovation, is crucial,” said Nicky Morgan, chair of the Treasury Select Committee. “As part of the inquiry, we will explore how this can be achieved.”
CryptoUK believes that regulation should focus on exchanges, brokers, and platforms rather than cryptocurrencies themselves. Also, that the Financial Conduct Authority (FCA) in the UK should be responsible for issuing licenses to approved platforms and implementing anti-money laundering (AML) rules and operational standards.
France too is expected to announce formal plans for cryptocurrency and ICO regulation in the coming weeks as part of its strategy to encourage blockchain and fintech innovation in the country whilst retaining control on the burgeoning industry.
Malta and Bermuda have already implemented ICO regulations which is creating an abundance of interest from blockchain and cryptocurrency companies.