The UK government’s recent interest in crypto has caused quite a stir, with some fearing that it could lead to risky decisions and undermine efforts to prevent financial crimes. But hey, who needs regulations when you can have bespoke rules? That seems to be the message lobbyists are “pouring into the ears” of politicians.
Martin Walker from the Center for Evidence Based Management warns against an “anxiety-driven flexibility” towards crypto which risks repeating previous boom-and-bust cycles in finance. Because we all know how well those turned out…
And let’s not forget about London – or should I say Londongrad/Moscow-on-Thames (depending on your level of snark). The city already has a reputation as a haven for money laundering and other financial crime, so inviting crypto into the fold would only give its critics more ammunition. Who wants to become known as a dark money laundromat anyway?
Even members of Sunak’s own party aren’t sold on his vision for crypto. A report from cross-party group Treasury Select Committee claimed cryptocurrencies serve “no useful social purpose” and expose consumers to frauds/scams; they also suggested regulating them like gambling instead of treating them like legitimate investments.
But don’t worry folks! The FCA is here with their cautious approach: “Given the volume of harm, our position has always been that it’s high-risk investment,” says Matthew Long at FCA Payments & Digital Assets division.”We’ve been clear that people should be prepared lose their money.” So if you’re feeling lucky…go ahead!
However there is concern over political pressure being put onto regulators by businesses looking for leniency around reporting requirements or offering riskier products such as derivatives etc., potentially leading us down another path where mistakes will inevitably happen due lackadaisical regulation practices underpinned by hype rather than sound judgement calls made independently without interference either way whatsoever- because why bother having independent regulatory bodies when you can just let the government and industry players call all the shots?
The FCA has dismissed these concerns, stating that they are an independent regulator who will create rules once their perimeter is set. But critics argue that regulators need to be able to tune out appeals from both sides in order for them perform their protective function effectively.
So what does this mean for crypto? Who knows! As long as there’s no clear regulation or political promises made around it, fear of potential risks remain amorphous and unspecific- but hey at least we’ll have some exciting headlines about select committees hauling people up before Treasury officials if things go wrong…right?