On 19 September 2018, UK’s Treasury Committee delivered its report on digital currencies, following an inquiry launched on 22 February 2018 to examine the role and impact of digital currencies in the UK, including the pros and cons to consumers, businesses and the Government. The report weighs up the potential impact of the blockchain on the financial landscape and the possible impact of regulation.
The Treasury Committee report can be seen as an example of successful engagement by the crypto industry. eToro is fully supportive of effective regulation in order to protect consumers and foster growth and innovation within the investment industry. As such in the UK, eToro was the driving force behind the establishment of CryptoUK, the first self-regulatory trade association for the UK cryptoasset industry. Its remit is to promote higher standards of conduct and to educate politicians and regulators about the industry and its potential.
The Treasury Committee’s recommendations are to be welcomed and reflect our calls for the introduction of proportionate regulation to improve standards and encourage growth.
Iqbal V. Gandham, Managing Director of eToro and Chairman of CryptoUK, commented on the report: “Self-regulation by the industry was always intended to be a starting point – this must now be matched by government action. Regulatory oversight is essential to ensuring consumer safety, guarding against malpractice and providing much-needed clarity to an industry that is fast maturing. It is therefore pleasing that the Committee has endorsed our suggestion on how this can be delivered by bringing responsibility within the FCA’s perimeter of oversight.”
The report by the Treasury Committee highlighted that cryptoassets have been adopted by various industries and that it is highly likely they are here to stay. Further, if the UK develops an appropriate regulatory environment for cryptoassets, the UK could be well placed to become a global centre for this activity. A positive step for the cryptoasset industry, welcomed by eToro.
Gandham, adds: “The Committee rightly recognises that the UK is well-placed to become a global centre for crypto but that it needs Treasury backing to make this a reality. We now call on the Government to take up these recommendations in the forthcoming Crypto Assets Taskforce report and introduce regulation that strikes the right balance between establishing safeguards and enabling the UK to become the global leader in crypto.”
The report indicates a willingness within the Government to provide support to the crypto industry. The industry will now await the FCA’s response to the Treasury Committee’s digital currencies report to ascertain where the UK goes from here. On a global scale, the introduction of regulation within the UK cryptoasset market could signal the beginning of similar regulatory support from other governments around the world.