Lisa Cameron MP, Chair of the Crypto and Digital Assets All Party Parliamentary Group in the UK parliament argues lawmakers need keep pace with rapid advancements in technology and crypto.
We are at a critical moment for the UK crypto and digital asset sector. We have seen rapid growth of crypto in recent years. Millions of people in the UK now own some form of cryptoasset and more and more firms now accept payments in crypto including big brands like Gucci and others.
The Government has said it wants the UK to be the global home of crypto and regulators around the world are now racing to develop their own approaches to crypto regulation.
Over the coming months the Crypto and Digital Assets All Party Parliamentary Group will be holding an inquiry into the crypto industry to better understand the key issues in relation to crypto and to ensure we make informed decisions on our approach to crypto regulation.
I am excited by the potential opportunities that crypto presents from innovation in technology, new forms of digital payments, financial inclusion and as a job creator. The UK has some fantastic examples of innovative crypto and digital asset businesses, right across the UK, not just in London, creating jobs and attracting some of the brightest talent in highly skilled roles.
There is a huge opportunity for crypto to be a force for good whether that's transforming the way we deal with money and make payments, or through financial inclusion and providing access to finance for minority groups and entrepreneurs.
The Russian invasion of Ukraine demonstrated the potential of crypto as a force for good after the Ukraine Government received millions in cryptocurrency donations to support its military and humanitarian efforts. Cryptocurrencies helped Ukrainians to buy crucial goods and services when there was no cash in ATMs and worried friends and family abroad could send money to their loved ones. Ukraine’s Deputy Minister of Digital Transformation, Alex Bornyakov said in recent weeks that crypto has become an ‘essential tool of Ukraine’s defence’.
The potential opportunities are vast but we must also remain focused on the potential challenges when we look toward developing an appropriate regulatory framework for crypto.
The Government has said it wants the UK to be the global home for crypto investment and regulatory clarity will be key to this in terms of convincing businesses to invest in the UK.
We’d like to see these big crypto firms choosing the UK as a place to set up and grow their business, creating jobs and contributing to the UK economy.
To achieve this we need to ensure our regulatory regime keeps pace with rapid advancements in technology and crypto, as well as making sure that regulation is thought through and proportionate so we don't inadvertently stifle innovation and growth in the sector.
Another priority must be ensuring we have high standards of consumer protection and financial education so customers know the potential risks.
One important note for regulators going forward will be to seek to properly engage and work with the crypto sector in developing any future policy and regulation. This is important because when we talk about what the future of crypto regulation might look like it's imperative that we all work together in the same direction to ensure that we get this right.
That means Government, central banks, regulators, policymakers and industry all working together with the same goal of developing a regulatory framework that is fit for purpose.
The views and opinions expressed are not necessarily those of AltFi.
26 October 2020
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