A new report suggests that if Britain’s MPs heavily approach the issue of regulating crypto in the U.K., it could have a negative effect on the market in the country.
Focusing on Bitcoin
The report states that moves by MPs to give the country’s financial watchdog, the Financial Conduct Authority (FCA), more leverage is “ashamedly geared around Bitcoin,” reports the Telegraph. It adds that this could penalize other kinds of assets.
The report was co-authored by the British Business Federation Authority (BBFA), law firm Baker Botts, venture capital fund Novum Insights, and TodaQ, a cryptocurrency exchange. It found that “bad regulation is worse than no regulation at all.”
Patrick Curry, CEO of the BBFA, said that the wrong legislation could see crypto companies moving elsewhere. This includes crypto-friendly locations such as Malta or Switzerland.
It is a very blunt instrument approach and I haven’t seen this in other countries. The use of this technology is still a voyage of discovery and these technologies are being refined for different types of use. My concern is the law of unintended consequences.
The U.K. government is considering extending the FCA’s powers so that it can govern the crypto market as well under its Regulated Activities Order. However, Neil Foster, corporate technology partner at Baker Botts, asked for “sophisticated” legislation. He added:
With sophisticated classification we should work out what could be a regulated activity. If you crowbar everything into the Regulated Activities Order you are making everything into an investment bank.
It remains to be seen what the U.K. will do. However, with Brexit approaching, it makes sense for the country to take a more favorable approach for fear of losing business. If it doesn’t, does it risk becoming the next China?
Is Regulation Coming?
Whether it’s wanted or not, regulation is a topic that isn’t going away.
The Paris-based Financial Action Task Force (FATF) has already said that it will launch guidelines for crypto regulation by June 2019. Whereas, Albania is also considering its own regulations to attract new investment to the country.
According to Jeremy Allair, CEO of Goldman Sachs-backed Circle, there needs to be regulation in the crypto industry at a global standard. In a report earlier this month, he said:
Ultimately there needs to be normalization at the G20 level of critical crypto-related regulatory matters.
Do you think regulation will eventually come to the market? How do you think it’ll impact it? Let us know in the comments below.
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