‘Wild West’ crypto-asset markets need UK regulation, say MPs

• The UK government’s Treasury Select Committee investigation into digital currencies and distributed ledger technology yesterday issued its report following several months of hearings and evidence gathering.

• The FT summarises the conclusions highlighting the report’s concerns over investor protection and the role played by crypto assets in money laundering, but also notes the report’s suggestion that with ‘appropriate regulation’ the UK could become a ‘global centre’ for the nascent sector.

• The committee wants the UK’s Financial Conduct Authority to oversee the crypto sector ‘as a matter of urgency’, and MPs also urged the government to prioritise introduction of new EU anti-money laundering regulations and their application to requiring crypto exchanges.

Comment

• In particular the committee notes the ‘slow, costly, and energy intensive’ nature of public blockchain technology underpinning the most popular crypto currencies, and that crypto currencies are not currently capable of performing the required functions of money.

• The committee noted that blockchain has the potential to bring benefits to some industries, noting financial services and supply chain and logistics

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