MPs have called for meaningful cryptoasset regulation by 2025, dedicated cryptocurrency units and a “crypto tsar” to ensure the UK can be an early leader in the sector.
The All Party Parliamentary Group (APPG) for Crypto and Digital Assets Group has today published a comprehensive report on the “urgent” need to regulate the sector.
The cross-party group, which is chaired by SNP MP Dr Lisa Cameron, said that mass consumer interest and continued adoption of cryptoassets like Bitcoin highlights the need to provide regulatory support.
The report noted that digital assets are already being regulated in other territories – such as the European Union – and that for the UK to act as an early leader, it would need to pass meaningful regulation within the next 12 to 18 months.
“Following the government’s announcement of its vision for the UK to become a global hub for cryptocurrency, the APPG launched our inquiry to help identify the issues that policymakers will need to consider moving forward,” said Cameron.
“Given the rapid growth of cryptocurrency and digital assets, the timing of this report is vital to protect consumers whilst ensuring the UK’s leadership in this sector can be realised.”
The report claimed there were serious doubts over whether existing regulators currently have the resources, capacity and technical expertise required, and therefore recommended relevant groups, including the Financial Conduct Authority (FCA), to establish dedicated crypto units.
The group suggested crypto regulation needs a coordinated approach across all relevant departments, which could be overseen by a newly established “crypto tsar”.
“I am grateful to everyone who has contributed to our initial APPG Inquiry: to industry, the world of regulation and the banking sector; they have shared their views and expertise which has helped to inform this report and have informed our recommendations to government,” added Cameron.
Richard Cannon, partner at Stokoe Partnership Solicitors, said: “As the APPG report suggests, speed is of the essence with this regulation, as the UK must act fast to ensure that it delivers comprehensive, world-leading regulation that establishes the UK as a leader in crypto regulation and cements its position as finance and technology hub.
“This must be backed up with the resources for UK regulators – and the government should certainly consider adopting a self-funding sector model.”
Kate Rhodes, senior counsel at online payments firm Paysafe, said: “Paysafe believes that bringing the crypto sector into the mainstream through a financial regulatory framework that is fit for purpose is the best way to ensure consumers are well-informed and risks are managed – as well as take advantage of the innovation and benefits the sector brings.
“Paysafe is broadly supportive of the UK government’s approach to achieve this.”
Prime Minister Rishi Sunak, then chancellor, outlined a plan in April 2022 to make the UK a “global cryptoasset hub”. That included legislative plans for stablecoins, and the Royal Mint creating an NFT. However, the Treasury scrapped the NFT project in March 2023.