Despite their volatility, cryptocurrencies like bitcoin are catching investors ’attention. More cryptocurrency-based assets, such as NFT and stablecoins, backed by strong currencies or commodities such as dollars and gold, are offered than ever before. And governments and regulators are taking note.
The United Kingdom, a global currency powerhouse with about $ 3 trillion in foreign exchange transactions a day, has decided it wants to become the top destination for cryptocurrency companies looking to set up.
Last month, Prime Minister Boris Johnson’s government announced it wanted to find ways to make stable currencies a valid form of payment and expand the nation’s state as Europe’s financial center to include new technologies and investments in the crypto industry.
“We want to see tomorrow’s business, and the jobs they create, here in the UK, and by effectively regulating, we can give them the confidence they need to think and invest in the long term,” said Rishi Sunak, the UK’s chancellor. United. Treasury, which controls government stock exchanges.
But with so much competition in space, constant volatility, and a growing lack of awareness about the risk of investing in such assets, where does the UK begin to work out a new regulatory framework?
For the answer, we went to Westminster, the seat of power in the United Kingdom, where we met Dr. Lisa Cameron, Member of the Scottish National Party and Chair of the new All-Party Parliamentary Group on Crypto and Digital Assets. His conversation with the BBC’s Victoria Craig ended slightly and condensed for clarity.
Dr. Lisa Cameron: [The committee] it has been running for three or four months now. It started because now we have to make sure that the UK keeps its place at the forefront of finance around the world, really. We want to see innovation, fintech, entrepreneurship come here, base here. And there was the feeling that we needed to educate members of parliament in the sphere, but also bring together policy makers with industry to create regulation, that was proportionate, a regulation that works. But that doesn’t stand in the way of innovation. It’s going to be, I think, quite dramatic, a bit like an upcoming industrial revolution, but more than industrial. And we want to be at the center of this here in the UK, and specifically in London.
Victoria Craig: And how are those conversations with industry experts, politicians, and business people going?
Cameron: Well, you know, it was very interesting because at first I thought I had a misconception that maybe the industry would be avoiding regulation. But those industries that want to come to the UK and do things right, are really saying, “Yeah, let’s do this. We want to work with the government to make sure this is a stable place for the work that we do financially, that there is a framework “Because those are the factors that are important for business development and growth.” Bad actors who don’t like regulation, we don’t want that. It’s not a race to the bottom here. We want to attract reputable companies within the industry.
Craig: In the Queen’s speech just this week, outlining the government’s legislative priorities, a proposal was put forward to start regulating this industry. Thus, stable currencies, which are backed by strong currencies such as the dollar, commodities such as gold and cryptocurrencies such as bitcoins. The big question, though, is how is that kind of regulation?
Cameron: I was lucky enough to be in Zurich, Switzerland, last month talking to its regulators and members of parliament about their trip, because they developed regulation there. It will need to be customized for the UK. Therefore, you will have this process of bringing together industry, government, the Bank of England, the [Financial Conduct Authority] together to see, you know, what’s going to work here. The first part, I think, is about education. In fact, we are catching up. In my opinion, as president of this group, it has to seem like something that is going to attract people to come here. But it’s about having a really balanced and proportionate posture. Many of our voters are already involved in cryptocurrencies and digital assets. So we have to have a way of making sure that we can protect people.
Craig: It couldn’t have been more timely for us to sit down and talk about this, given the moves we’ve seen in specific assets this week. Like bitcoin, which loses about half of its value [since a peak in November]. And it highlights the intense volatility that some of these assets may experience. So how do you look at that kind of thing from a consumer protection standpoint? And do you worry that this might contaminate, in some way, what you’re doing and how you expect to attract business like that?
Cameron: That’s one of the concerns that members of parliament have, really, is about protecting consumers and making sure people are informed and making decisions based on evidence and as informed as possible. So that when people invest they have accurate information, they know exactly what they are investing in. Looking at, you know, the impact on families when people lose money, and I worked as a psychologist before I got to parliament, myself. I am aware that people can become quite addicted to investing, gambling, and so on. That’s why we need a stable framework here. And that’s why we don’t want to lure bad actors here.
Craig: We talk a lot about the UK in a post-Brexit world. And I think one of the things that everyone is talking about, from this side, is that the country wants to maintain the strict regulatory standards by which it was known. And so I wonder how much competition with other European capitals they want to become the financial center of Europe, how much does that affect the way you can be looking at regulation? I think a good example of push and pull is Binance, which is the largest cryptocurrency trading platform, which last week announced that it has a regulatory green light to go and set up its regional headquarters in Paris. And that after last year, when the FCA said it was unable to regulate Binance. So how do you look at that kind of thing? How can a company sit between two countries with such a polarized view?
Cameron: Yeah Al that sounds pretty crap to me, Looks like maybe this is a shock to the industry. And I had a bit of a dialogue: last night I was speaking at an event where other industry partners were saying ‘We want to stay in the UK’. You know, they’re saying quite clearly, ‘We want to stay in the UK.’ has a lot here to offer. But we have to start moving forward, because we can’t keep talking about it. We need not just government words, but action. “
Craig: Is there a timeline for when you want to have a basic regulatory framework?
Cameron: Ideally, I would like to push things, like six months to a year. We can’t start standing still. We also have to push, or we will be left behind.
Craig: However, is it a realistic timeline? Given that some of these organizations are known to be quite bureaucratic and slow? And especially when it comes to inventing new regulations? It’s ambitious, don’t you think?
Cameron: I think we will have to be ambitious, yes. Can things take a little longer than that? Yes. But if I’m going to sit here and say, ‘Well, this is going to take five or 10 years,’ where are we going to be, you know? Behind the curve, and we’re not going to achieve any of our goals.
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