Crypto-assets, including Bitcoin and Blockchain are not covered by the UK's regulatory body the Financial Conduct Authority (FCA). However a group of MPs on the Treasury Committee says regulation should be treated as a "matter of urgency."
"Given the growing risks surrounding crypto-assets and subsequent consumer detriment, the introduction of regulation should be treated as a matter of urgency," the report states.
— CurrencyBuzzer (@CurrencyBuzzer) September 19, 2018
Bitcoin is a peer to peer electronic version of cash developed under the pseudonym Satoshi Nakamoto to send payments directly from one party to another without needing a bank. Blockchain is a virtual chain of blocks each containing specific data that cannot be changed and links to the next block, creating a chain of information; each block is anonymous but the data inside is transparent.
Iqbal Gandham, chair of Crypto UK told Sputnik: "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," Gandham told Sputnik.
"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."
"Self-regulation within the crypto-asset industry is clearly insufficient. The introduction of formal regulation would make standards compulsory and relevant regulators can hold industry to account, Gandham told Sputnik."
— Bitcoin News (@PrecioBTC) September 19, 2018
Submitting evidence to the committee, the Bank of England said: "Measured against the US dollar, Bitcoin is ten times more volatile than sterling, and other cryptocurrencies are even more volatile."
Japan's Financial Services Agency has approved 11 cryptocurrencies after it officially recognized Bitcoin as legal tender in April 2017. According to Coinfloor, the Japan approach "crafted a framework which protects consumers, enables innovation and enables customers to adopt innovative products and services quickly."
Meanwhile, China, as reported by Bloomberg in January 2018, is "escalating its clampdown on cryptocurrency trading, targeting online platforms and mobile apps that offer exchange-like services."
Gibraltar has designed a set of regulatory principles including "conducting business with honesty and integrity." France views any activity surrounding crypto-assets and Bitcoin as operating in an unregulated market, similar to the UK. Germany has classified crypto-assets as "units of account from a supervisory point of view and therefore as financial instruments."
Meanwhile, members of the Treasury's crypto-assets committee believe the UK should learn from the experiences of other countries and thier regulatory frameworks surrounding crypto-assets before introducing its own.