This morning, a Parliament Treasury Committee issued a report that was highly critical of crypto, announcing that it believes this sector should be regulated similarly to gambling. The Committee said many digital assets have no intrinsic value, creating unecessary risk for UK investors.
Today, Innovate Finance joined a gathering of voices that have been critical of the Committee’s report. Innovate Finance, a Fintech industry advocacy group that has garnered support from the UK government, said they agree with the Committee’s recognition that the technology (blockchain) can benefit financial services while politely disagreeing with the Committee’s description of crypto being little more than a trip to a casino. The Committee is made up of MPs from various parties.
Innovate Finance states:
“The Treasury Committee also concludes that regulating the trading of unbacked cryptoassets will create a ‘halo’ effect that could lead consumers to conclude that it is safer than it is. As the trade association for FinTech in the UK, including responsible cryptoasset service providers, we strongly support regulation of cryptoassets, which is essential for consumers, stable markets and a level playing field. The Committee’s ‘halo’ effect argument against regulation risks leaving consumers and markets with no guard rails or protections. Instead, subject to getting the details right, we support the UK Government’s overarching approach to regulating cryptoassets, which covers a range of areas where events over the last year have underlined the need for regulation: including information, governance and certification, financial promotions and custody.”
The UK government has been supportive of digital assets, with the PM stating he wants to make the UK a crypto hub. Innovate Finance says it concures with the government’s approach of applying financial services regulation to crypto.
“Getting this right does require urgent, focused, and ongoing engagement and discussion between industry, regulators, government and parliamentarians, which we will continue to support.”
This past week, the European Union finalized rules for digital assets under MiCA or Markets in Crypto Asset regulation. The EU believes it is pushing forward while other jurisdictions, like the US, struggle to create bespoke rules.