UK lawmakers and The Treasury Committee expect the government to carry out a reform to curb crimes in crypto and protect the consumers.
The ‘Wild West’ must come to an end, say UK lawmakers in hopes to make UK the crypto-hub of the world.
Digital Currencies Inquiry
The UK Lawmakers opened an inquiry regarding Cryptocurrencies, and if they face threat to the people, business institution and the government.
The inquiry will widely research on the Distributed Ledger Technology – such as blockchain- on financial institutions, including the central bank and financial infrastructure.
The lawmakers want to scrutinize the regulatory response to these digital currencies and digital currency trading and how it could be balanced to provide adequate protection for all.
The UK Treasury committee gives Financial Conduct Authority (FCA) more authority to regulate crypto markets. The latest report also recognizes that ICO (Initial Coin Offering) organizers can find loopholes to avoid regulations.
Apart from keeping the users warned FCA can’t do much, as users can still money in ICOs as they provide future access to a service or utility.
“It’s unsustainable for the government and regulators to bumble along issuing feeble warnings to potential investors, yet refrain from acting,” says Nicky Morgan, the committee’s chair.
The digital currencies are subject to high volatility and are completely dependent on the sentiment of the market.
Japan became the first country to adopt regulations to crypto trading and exchanges. And aims to harness the potential of this industry. Whereas countries like China and South Korea have come down on very stringent rules and even bans on cryptocurrencies.
The surge in the interest for cryptocurrencies doesn’t seem to come down even though bitcoin hit bottom to $6350 last week. Lawmakers are trying their best to regulate and so far warnings don’t seem to phase investors and consumers.
A self-regulatory group, CryptoUK, was started just before the inquiry on digital currency. They aim to promote the proportional regulatory environment and have been doing just that.
The Chair of CryptoUK, Iqbal Gandham said that they have been calling for the introduction for proportionate regulation to improve standards and to encourage growth. Further stating, “Self-regulation by the industry was always intended to be a starting point – this must now be matched by government action.”
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The European Union has so far hasn’t given much thought into regulating the sector due to its relatively small size. But there is report being prepared for the bloc and hoping to adopt rules on cryptocurrencies
However since there is an increased risk for both individual and corporate investors the government aims to provide security. And it hopes that these regulations at the minimum will curb money laundering and add consumer protection.