Select committee: Treasury Committee
Recommendation 2
Fifteenth Report - Regulating Crypto
Published 17 May 2023
Paragraph 31
Addressed to HM Treasury
Treasury Committee The crypto-asset industry All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
It has been more than four years since our predecessor Committee’s Report called for greater regulation of the cryptoasset industry, and the FCA faces challenges in implementing existing and proposed crypto regulations. It is important that the Government and regulators strive to keep pace with developments, including by ensuring that the Financial Conduct Authority’s authorisations gateway is open and effective, so that potential productive innovation in financial services is not unduly constrained.
From: Treasury Committee, Fifteenth Report - Regulating Crypto (HC 615), paragraph 31, 17 May 2023
Government response
The government responded to the whole report on 20 July 2023 (deadline 17 July 2023).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government "firmly disagrees" with the Committee's recommendation to regulate retail trading in unbacked cryptoassets as gambling, while agreeing on the need for robust regulation and a balanced approach to innovation.
- It says a financial services framework is "more appropriate" for the risks of unbacked cryptoassets, and gives as reasons the risk of misalignment with international standards, "unclear and overlapping mandates" with the Gambling Commission, and that gambling regulation would be "unlikely to address" risks identified in the FTX failure.
- It "strongly agrees" with the need for a "balanced and technology-neutral approach" to supporting innovation, including cryptoasset technologies.
- On consumer protection, it says legislation on cryptoasset financial promotions "will be in force by late 2023", and points to its consultation proposals, including an issuance disclosure regime.
- It plans Financial Market Infrastructure sandboxes, with the first to be implemented "this year" and run by the FCA and Bank of England. On the Royal Mint NFT, it says the Royal Mint is not proceeding "at this time" but "will keep this proposal under review".