The Crypto and Digital Assets All Party Parliamentary Group published a report on June 5 offering 53 recommendations to regulate cryptocurrency.
Among these recommendations, the parliamentary group suggested creating the role of a ‘Crypto Tsar.’ The Tsar’s duties would involve coordinating among different departments to ensure a “consistent approach” to crypto regulation, the party noted in the report.
The UK aims to become a global cryptocurrency hub and the party recommended the government to weigh the risks carefully. At present, cryptocurrencies do not pose any “systemic risk,” the report noted. But the party advised the government to continue to monitor the industry’s growth and take appropriate risk management actions as and when the industry scales.
The party also said that the UK stands to risk “falling behind other countries” in the race to reign in the crypto sector. The party, therefore, advised the government to provide legal and regulatory clarity within the next 12 to 18 months. But the party also noted that it was important to strike a balance in regulation to ensure consumer protection without stifling innovation.
The report highlighted that crypto firms in the UK are struggling to secure banking services and urged the government to find a solution soon. The party also said that for stablecoins to emerge as a trusted new payment system, regulators will have to ensure they are backed by fiat currencies and other high-quality assets.
To tackle scams and crimes, the party said that it is important for the government to be agile and adapt to the latest techniques used by criminals. And law enforcement agencies need to be properly equipped with resources to tackle crypto-related crimes, the report noted.
But most importantly, there is a need to raise awareness among consumers. There needs to be a “coordinated and concerted effort by all players including industry, regulators, law enforcement and government to clamp down on scams,” the party said.
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