Why The UK Parliament’s New Crypto Group Is Significant:

[email protected] 2022-01-18 10:01

The world of cryptocurrencies continues to grip the attention of the mainstream world, and this time it has managed to cement itself in the world of parliament.

In recent news, The UK Parliament has created a group, composed of MPs and Lords across different parties, to address issues regarding cryptocurrency and the digital assets sectors. This board will essentially act as a forum, where parliamentarians, policy makers and components of the sectors themselves can cover debate on the industry, from its policies to its regulatory framework. The hope is that this cohesive understanding of the sector will also encourage positive consequences such as innovation and growth, whilst at the same time stamping out issues such as consumer exploitation and economic crime.

How Tense Is The UK’s Relationship With Crypto? – It seems that there is always a grappling narrative between the relevancy and usefulness of cryptocurrencies, versus skeptics who doubt their trustability. How do people feel about this new group then?

The chair of the new group, Lisa Cameron MP, obviously highlights the necessity for the group. She comments that ‘we must ensure that we have an appropriate regulatory framework in the UK which supports innovation and guarantees that the UK remains an attractive destination for innovative firms to set up and grow.’ It is clear then that whilst the board will aim to protect consumers from fraud and scams, creating a healthy environment to further the crypto space in the UK is central. (1)

Anton Chashchin, Managing Partner of Bitfrost.io, gave insightful comments from the view of someone very involved and established in the crypto and digital asset space. He highlighted the key priorities of the group beyond simply providing a regulatory framework. ‘A priority of the group should be education so it’s important the UK government also takes steps to educate the general public about crypto. The stigma attached to crypto is slowly fading, however there is still a lack of understanding on how crypto works and what the potential benefits are.’ With this, Chashcin believes that people will be better able to understand a product and make healthier, more informed decisions to diversify their portfolio.

‘Lastly, the group should prioritise connecting with people from the industry and different organisations or groups that have already formed to create a roundtable discussion and ensure that all needs are taken into consideration.’ Collaboration is key, and creating an ecosystem where people are able to communicate and connect will no doubt provide greater transparency and reduce risks.

The need to protect consumers has also been echoed by others simply observing the space. Conservative MP, Richard Holden, told iNews that the burgeoning crypto industry ‘could quite easily and sensibly be considered gambling’, implying it may require prudent regulation. (2)

Former aide to Jeremy Corbyn, Matt Zarb-Cousin, expressed the same sentiment as Cameron and Holden, showing an agreed response across the political spectrum. Zarb-Cousin voiced his view on fan tokens, which are essentially a crypto tied to an organisation. We’ve seen this with many football teams, spending over $350 million on fan tokens already – I personally commend AC Milan on the success of theirs. (3) However, Zarb-Cousin importantly expressed the dangers and risk that come with this, as it is essentially another form of gambling, but one that is ‘even worse to be offering a way into cryptocurrency through the pretense of empowering them in effectively a completely unregulated area.’ It seems everybody is aware of how enticing crypto can be, but fearful of its unpredictability.

The Value Of Crypto – According to CoinGecko, the cryptocurrency market roared to a valuation of $2.3 trillion as of the 17th December 2021(4). Currently, the spotlight is shining on Changpeng Zhao, CEO of Binance, one of the world’s largest crypto exchanges. His own net worth has been estimated to be at $96 billion, according to the Bloomberg Billionaire Index. (5) This may even be an underestimate too, as the figures do not include Zhao’s personal crypto holdings. Yet with such attention comes such controversy, as the U.S. Department of Justice and Internal Revenue Service are now investigating whether one entity Zhao controls, Binance Holdings Ltd., is a conduit for money laundering and tax evasion, according to people with knowledge of the matter. It just goes to show how useful a specific crypto group can be in the UK if the space catapults here as it seemingly has done in other locations.

Is this all just a matter of good financial housekeeping? Or is it just a pompous, overblown topic? Whatever the case, crypto remains relevant and the government is clearly putting themselves in a position to best understand it. Will this affect their strategy for CBDCs? Are the two even related? Let’s see as the space further unfolds!

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