Cryptocurrency & Digital Asset Inquiry 2022
In August 2022 the Crypto and Digital Assets All Party Parliamentary Group (APPG) announced an inquiry into the UK Cryptocurrency and Digital Assets sector following the UK Government’s announcement of its landmark vision to make the UK the global hub for cryptocurrency investment. The APPG issued a Call for Evidence inviting views from across the sector including from operators, regulators, industry experts, and the general public on the need for regulation of the sector. The inquiry invited written submissions from all interested parties and held a number of evidence sessions in which we heard from industry experts on the fundamental considerations that will need to be made over the coming years in order for the Government to achieve its vision for cryptocurrency and digital assets.
Inquiry findings and full report
The APPG published the findings of this inquiry in its report – ‘Realising Government’s Vision for the UK to Become a Global Hub for Cryptocurrency & Fintech Innovation’ on Monday 5th June 2023. This report sets out the primary issues and considerations for policymakers when developing future regulation for the cryptocurrency and digital asset industry in the UK, based on the contents of all written submissions received by the inquiry and the views put forward in oral evidence sessions. The report makes a total of 53 recommendations to Government on a number of key areas including the UK’s approach to regulation of cryptocurrency; the role and current approach of UK regulators including the Bank of England, the FCA and the ASA; the potential offered by Central Bank Digital Currencies – ‘a Digital Pound’; and risks faced in terms of Consumer Protection and Economic Crime. The recommendations set out in this report are intended to establish a foundation for further discussion and debate regarding the future of cryptocurrency and digital asset regulation in the UK and to help inform policymakers.
Announcing the launch of the report, Chair of the Crypto and Digital Assets APPG (APPG), Dr Lisa Cameron MP, said:
“As chair of the Crypto and Digital Assets All Party Parliamentary Group in Parliament, I am delighted to present the group’s inaugural report considering the potential opportunities and challenges of realising the Government’s vision for the UK to become a global hub for Cryptocurrency and Digital Assets. Following the Government’s announcement of its vision for the UK to become a global hub for cryptocurrency, the APPG launched our Inquiry to help identify the issues that policymakers will need to consider moving forward. I am grateful to everyone who has contributed to our initial APPG Inquiry: to industry, the world of regulation and the banking sector; they have shared their views and expertise which has helped to inform this report and have informed our recommendations to Government. Given the rapid growth of cryptocurrency and digital assets, the timing of this report is vital to protect consumers whilst ensuring the UK’s leadership in this sector can be realised.”
Download the reports
A note on the inquiry
The APPG Inquiry sought views on 5 key areas of interest:
- The UK as a global home of cryptocurrency and digital asset investment:
- The potential opportunities and risks associated with cryptocurrency and digital assets in the UK;
- The UK’s current approach to regulation of cryptocurrency and digital assets:
- The current state of regulation in the UK of cryptocurrency and digital assets;
- Whether the UK’s current approach is aligned to the Government’s stated ambition for the UK to be a global hub for cryptocurrency and digital asset investment?
- What is required to fulfil this ambition?
- The role and current approach of UK regulators including the Bank of England, the FCA and the ASA in relation to cryptocurrency and digital assets:
- Views on the current approach by UK regulators, specifically the Financial Conduct Authority, the Bank of England, and the Advertising Standards Authority.
- Central Bank Digital Currencies:
- Views on what any UK CBDC should look like;
- Views on the potential use case for a UK CBDC;
- Views on the opportunities and risks associated with a UK CBDC.
- Consumer Protection and Economic Crime:
- Views on the potential risks posed to consumers by cryptocurrency and digital assets;
- Views on whether current protections in place are sufficient and any further action that may be required in this regard;
- The level of economic crime in relation to cryptocurrency and digital assets and the effectiveness of current controls in place to combat any potential risks.
The inquiry received written submissions from 49 organisations and individuals on a range of issues relating to crypto and digital assets regulation, specifically:
- Aave
- Association for Financial Markets in Europe (AFME)
- Argent
- Arqit
- The Advertising Standards Authority (ASA)Association of Accounting Technicians (AAT)
- Binance
- Circle
- City of London Corporation
- CoinBase
- CoinFlip
- Consensys
- CryptoUK
- Currency.com
- Digital Currencies Governance Group
- Digital Economy Institute
- Digital FMI Consortium
- Digital Issuance Working Group
- Digital Pound Foundation
- DigiVault
- Elliptic
- Electronic Money Association (EMA)
- Fari Solutions
- FIS Global
- Gemini
- Imperial College Business School
- Kineses Money
- LawBeam
- Lithex
- LMAX Group
- Lukka
- Luno
- Mastercard
- Onfido
- Pavia Corp
- Payments Association
- Paysafe
- PoundToken
- Preyer GmbH
- Ripple
- RUSI
- Socios
- Sorare
- Wirex
- Zumo
The APPG also received submissions from:
- Stephen Underwood
- Andrei Lipkin
- Nikola Tchouparov
The inquiry subsequently held 6 public oral evidence sessions in Parliament in which the APPG heard from 18 industry experts including crypto operators themselves; industry trade bodies; UK regulatory bodies; and leading experts in the field, specifically:
- Ian Taylor, CryptoUK
- Vitaliy Kedyk, Head of Strategy, Currency.com
- Susan Friedman, Head of Policy, Ripple
- Faryar Shirzad, Chief Policy Officer, CoinBase
- Professor Deeph Chana, Co-Director of Institute for Security Science & Technology, Imperial College Business School
- Dion Seymour, Crypto and Digital Asset Technical Director, Anderson
- George Morris, Partner, Simmons & Simmons
- Professor Sarah Green, Commissioner for Commercial and Common Law, Law Commission
- Adam Jackson, Director of Policy, Innovate Finance
- Teana Baker-Taylor, Vice President of Policy and Regulatory Strategy, Circle
- Anatole Baboukhian, Senior Manager – Public Policy, FIS Global
- Gordon Mead, Head of Regulatory Policy, City of London Corporation
- Toby Norfolk-Thompson, Director and Chair of Advisory Council, Digital Economy Institute
- David Carlisle, Vice President of Policy and Regulatory Affairs, Elliptic
- Jordan Wain, UK Policy Lead, Chainalysis
- Kathryn Westmore, Senior Research Fellow, Royal United Services Institute (RUSI)
- Guy Parker, Chief Executive, Advertising Standards Authority (ASA)
- Nick Davey, Payments Specialist, Payment Systems Regulator (PSR)
In total the APPG heard from 67 organisations and individuals through both official written submissions and oral evidence. This report sets out the primary issues and considerations for policymakers when developing future regulation for the crypto and digital asset industry in the UK, based on the contents of all written submissions received by the inquiry and the views put forward in oral evidence sessions. The report has been compiled by Lisa Cameron MP as Chair of the APPG and her team, as well as from input and views provided by other elected officers of the APPG and has been supported by CryptoUK in its role as secretariat for the APPG.
The APPG would like to thank everyone who took the time to provide their views in writing and who provided oral testimony to the inquiry for their contributions and for helping to inform this report.
