Parliament launches digital assets-focused group

A cross-party group of MPs and Lords in the UK Parliament have formed a new group focused on the UK’s cryptocurrency and digital assets sector.

The Westminster All-Party Parliamentary Group (APPG) is backed by digital asset trade association CryptoUK, who said the group will act as a forum for parliamentarians, policymakers, and the UK crypto sector to discuss policy and regulation of the industry.

The group will look to address key challenges for the sector according to CryptoUK, such as creating a regulatory framework that supports innovation and growth but also considers issues such as consumer protection and economic crime.

The group will explore a range of topics including protecting consumers from fraud and scams, advertising, financial education and inclusion, the UK’s role as a leader in financial services and innovation, environmental issues, and the future of digital payments.

CryptoUK said the group intends to investigate the state of the UK crypto sector and recent concerns raised around financial crime and advertising, and that it will consider the growth of crypto over recent years and the need for regulators and government to keep pace with the rapid advancements and increased adoption of crypto by consumers.

The trade association said the group will also look at international examples from other jurisdictions that have already taken steps to regulate the crypto sector.

Certain members of the UK government have expressed pessimistic views on the future of some cryptocurrencies.

In December, Sir John Cunliffe, the Bank of England’s deputy governor for financial stability said the value of bitcoin could “practically drop to zero”, during an interview with the BBC’s Today program.

Goldman Sachs analysts earlier this week estimated that the total market capitalisation of bitcoin, currently the world’s most valuable cryptocurrency, was around $700 billion.

“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,” said Lisa Cameron MP, chair of the crypto and digital assets APPG. “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”.

“We must ensure that we have an appropriate regulatory framework in the UK which supports innovation and guarantees that the UK remains an attractive destination for innovative firms to set up and grow. It is equally vital that we have a clear regime to protect consumers, ensuring they understand the risks, and are protected from the risk of economic harm posed by fraud and scams.”

“Looking at how we can best protect consumers must be a top priority for government and regulators. There must be clear rules for the advertising of cryptoassets in the UK so customers are protected and to help UK crypto firms to stay within the rules. We also want to see clarity of regulation particularly in terms of money laundering protections.”

She added: “We will be looking at the work of the FCA in registering UK crypto firms so that customers are clear about which firms are regulated and which aren't but which also gives UK firms business certainty.”

“We are delighted to see MPs and Lords in Westminster taking an interest in UK crypto,” said Ian Taylor, executive director of CryptoUK. “The UK crypto sector has the potential to transform the UK’s financial services industry.”

“UK Crypto firms want to see a clear regulatory framework in the UK that supports growth and innovation in this space but that also encourages a strong and healthy UK market and promotes consumer protection. We have witnessed a surge in retail and institutional adoption of digital assets, both here in the UK and around the world.”

He added: “Consumer attitudes towards cryptocurrencies have shifted since the start of the pandemic with 78 per cent of adults saying they have heard of cryptocurrency and 2.3 million UK adults now owning some form of cryptocurrency with more people now seeing them as an alternative to mainstream investments.”

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