Categories: ICO

UK Parliamentary Committee Calls For Regulation Of Cryptocurrency

Click here to view original web page at www.ethnews.com

With France's recent consideration of a law that would govern ICOs being a notable exception, European countries have for the most part been slow to regulate the cryptospace. But a parliamentary committee in the UK thinks the time to act is now. On Wednesday, the group released an extensive report that calls for the Financial Conduct Authority (FCA) to be granted the authority to regulate ICOs, in hopes of creating an environment where cryptofinance can thrive.

But the report the group produced does not display much affection for cryptocurrency, ICOs, or even blockchain tech.

The report claims there is to date not a single cryptocurrency that adequately fulfills the three roles of money (functioning as a store of value, a medium of exchange, and a unit of account). Consequently, cryptocurrencies can't even rightly be called "currencies." (The report instead refers to them as "digital assets.")

"Well-functioning cryptocurrencies currently exist only as a theoretical concept," the report claims.

The authors of the report remain unconvinced that these "assets" can benefit those who are currently excluded from financial markets. "Efforts to further financial inclusion are best focused on reducing the number of people without access to bank accounts, rather than increasing the numbers with access to crypto-assets," the report states.

They are also skeptical that the financial industry can benefit much from blockchain technology, finding it "slow, costly, and energy-intensive," and writing "the Committee has not been presented with any evidence to suggest that universal applications of the technology are currently reliably operational."

Despite these doubts, the authors of the report still, for whatever reason, hope the UK will become a "global centre for this activity," and believe that may happen if a stable regulatory environment can be created. At the very least, this should involve anti-money laundering and consumer protection regulations.

For now, the UK is party to anti-money laundering rules. One of the few actions Europe has taken regarding cryptocurrency is the adoption of the fifth anti-money laundering directive. The committee praises the directive, describing it as a "step forward." However, the directive will cease to apply to the UK once the country exits the European Union.

The consumer protections recommended by the report primarily regard ICOs, which currently exist in a confusing regulatory situation. When an ICO represents a "transferable security," the FCA has authority to regulate and offer some investor protections. But "when tokens represent a claim on prospective services or products," they do not fall under the FCA's purview. Ultimately, most ICOs in the UK are unregulated.

In its conclusion, the group writes:

"[T]he Committee believes that the introduction of regulation could lead to positive outcomes for the crypto-asset market. The implementation of crypto-asset regulation in the UK may enable the market place to move to a more mature business model that improves consumer outcomes and enables it to grow sustainably."

Why they would want it to grow, given their skepticism, is anyone's guess.

Tim Prentiss is a writer and editor for ETHNews. He has a master’s degree in journalism from the University of Nevada, Reno. He lives in Reno with his daughter. In his spare time he writes songs and disassembles perfectly good electronic devices.

Like what you read? Follow us on Twitter @ETHNews_ to receive the latest UK, cryptocurrency or other Ethereum cryptocurrencies and tokens news.

cinerama

Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Share
Published by
cinerama

Recent Posts

Bitcoin Price Fumbles Under $10,000 as Traders Fear $8K Target

Bitcoin price is trading below $10,000 and a further pullback could drive price even lower. | Source: Shutterstock By CCN… Read More

3 hours ago

Mark Carney’s Dollar-Killer Digital Currency Threatens Bitcoin

Mark Carney, governor of the Bank of England (BOE), has a plan to challenge the dollar's dominance. | Source: Photo… Read More

3 hours ago

Crypto Funds Are Outperforming – You Shouldn’t Be Surprised

Josh Gnaizda is the founder of Crypto Fund Research . It’s one of the worst-kept secrets in the alternative investment… Read More

3 hours ago

FTC Settles With Promoters of Multi-Level Marketing Crypto Scheme

The U.S. Federal Trade Commission (FTC), has settled charges it filed last year against four promoters of crypto-denominated multi-level marketing… Read More

3 hours ago

Ethereum moves closer to Istanbul hard fork as Geth and Pantheon merge all improvement protocols

While Ethereum is on its way to shifting from Proof-of-Work to Proof-of-Stake, the developer community is currently engaged with the… Read More

3 hours ago

Binance Research: Too early to rule out Ethereum blockchain competitors

Binance Research, the market research and analysis arm of Binance, has published a report on tokenization and the key factors… Read More

3 hours ago

This website uses cookies. We use these cookies to collect data about your interaction with our website for the purpose of continuously improving your experience with our site. For more information we encourage you to read our privacy policy.

Read More