Some lawmakers from Britain called for the regulation of the domestic crypto market that they claimed to be the “Wild West,” while insisting that rules could actually help the UK to become a global center for crypto assets.
In one report which has been published by the British Parliament’s Treasury Committee on Wednesday, the British lawmakers claimed that investors are afforded very little protection from many risks which include no formal recourse for consumer compensation. It has no longer been sustainable for the government, nor for regulators to continue issuing “feeble warnings” without any action, the committee added, insisting that regulation addressing consumer protection, as well as anti-money laundering norms was the minimum measure which was required.
Wild West industry of crypto assets
Volatile prices, hacking concerns among exchanges which are vulnerable to attacks, as well as minimal consumer protection and money laundering concerns, are all underlined as problems by the findings of the report. The government of UK, as well as regulators ambiguity, was no longer sustainable.
The chairman of Treasury Committee, named Nicky Morgan, said that Bitcoin, as well as some other crypto assets, exist in the Wild West industry of crypto assets. This unregulated industry actually leaves investors to face a lot of risks. Given the high price volatility, the hacking vulnerability of exchanges, as well as the potential role in money laundering, the Treasury Committee strongly believes that regulation has to be introduced.
Morgan also added that it is unsustainable for the Government, as well as for regulators to bumble along issuing feeble warnings to potential investors, yet refrain from acting. At a minimum, regulation has to address consumer protection, as well as anti-money laundering, added Morgan.
Regulation should lead to positive results
In that same report, the Treasury Committee also urged the government to evaluate the potential risks in the crypto sector to assess then whether the growth of the industry should be encouraged or not.
However, regulation could lead to some positive outcomes which include liquidity for the crypto market, the Treasury Committee added.
The member of the Parliament, Nicky Morgan also insisted that if the government decides that crypto asset growth has to be encouraged, appropriate and proportionate regulation could also see the UK becoming a global center for this type of activities.
The report also follows a formal inquiry which is launched by the Treasury Select Committee of UK, which is a powerful group of cross-party MPs, into cryptocurrencies earlier in 2018.
Regulation should be treated as urgency
Ironically, the authorities of UK were urged to revisit their hands-off, wait and see approach by fintech firm Ripple, commonly connected with the cryptocurrency known as XRP. Earlier in 2018, the head of regulatory relations of Ripple, named Ryan Zagone, called on the British regulators in order to end the ‘Wild West’ era of cryptocurrencies, urging Britain to take a cue from Japan where the exchanges are regulated, as well as under supervision while cryptocurrencies such as Bitcoin, are legal as a payment method.
Since, the government of Britain launched a cryptocurrency task force, comprising of Her Majesty’s Treasury, the Bank of England, so as the Financial Conduct Authority, to understand the risks and benefits of the sector. The working group also agreed on a handful of key objectives at the time of the first meeting earlier in May, this year.
In its concluding summary of recommendations, the Treasury Committee said that the introduction of regulation has to be handled as a subject of urgency.