Cryptocurrency might not be anything brand new, but there is no denying that it has become more popular and familiar over the last couple of years.
Currently, it’s unregulated, which can mean it is unsafe for those that are not used to investing in digital currency or similar propositions. However, news just came out that the UK Government is discussing regulation options.
The UK Financial Services Bill
In July 2022, the UK Government announced the UK Financial Services and Markets bill details. This bill has been put together to show that the UK offers competitive financial services, especially since it exited the EU.
Whilst plans around UK finance are nothing new, many were surprised to see that this included Crypto assets and Stablecoins for the first time. This is the first step made by the UK Government to embrace Cryptocurrency and move towards regulation of some kind.
For a while now, the UK Government has talked of supporting the growth of crypto while also trying to introduce regulations. This sort of mixed messaging has been confusing for many investors, particularly those who don’t want the kind of strong regulations we see for people who enjoy betting at a UK gambling site.
As you might expect, there are different opinions as to whether we need regulation for Cryptocurrency, but it seems the UK Government is moving toward this happening.
Why Stablecoins?
Whilst it might be a while before we can start spending Bitcoin in Asda, we are possibly moving towards Stablecoins being more of an accepted currency.
Although Stablecoin is a type of Cryptocurrency, it is based on the value of the US dollar and therefore isn’t likely to fluctuate massively up and down as we have seen with the likes of Bitcoin in the past.
The bill announced details of helping to make Stablecoins a more viable way to send and receive payments. Still, those who wish to issue Stablecoins must be licensed by the Financial Conduct Authority. A move made to help keep investors as safe as possible.
It is thought that the UK Government would like to transform the UK into an ‘International Crypto Hub,’ with details announced by the Chancellor in the spring of 2022.
The idea is to allow consumers to be able to use Stablecoin without worrying about how safe it will be. The measures alongside this will enable the UK to become a global center, recognized for cryptocurrency technology and investment opportunities.
Will We Get Cryptocurrency Regulation in the Future?
The debate surrounding the merits of Cryptocurrency regulation is ongoing & something that probably won’t be wrapped up anytime soon.
The issue is that there are strong arguments for both sides. Those who believe cryptocurrency regulation is needed and those who say it goes against what Cryptocurrency was designed for should not be introduced.
Recently a cross-party group of lawmakers in the UK has launched an inquiry into the whole Cryptocurrency sector, with a strong focus on regulation and what may be needed.
Crypto and Digital Assets All Party Parliamentary Group (APPG) are talking to regulations, members of parliament, industry experts, and even Cryptocurrency service providers to discuss a range of topics.
Things that they will look at to present their findings to the UK government will include opinions on regulation, Cryptocurrency crime, and even a look at how it should be advertised if that was a route that companies wished to go down.
Currently, there is nothing official in place regarding regulation for general Cryptocurrency, digital assets, and/or NFTs. For many, this is something that they would like to see continue.
However, without any regulation in place, people are open to potentially being scammed, which is something that the financial industry, in general, will be keen to avoid.
Stocks and shares, banking, and even gambling all come under a set of regulations that must be followed by any operators that want to offer these services within the UK. This means that people who opt to partake in these know that their money is safe and will be treated fairly.
Of course, no one can guarantee a win at the casino or that stocks won’t go down in value, but the regulation does mean that everything is dealt with fairly.
The Future of Cryptocurrency
The truth is that no one can say for sure what the future of Cryptocurrency will look like, but we can be sure that it isn’t going anywhere soon.
Of course, news stories like that of the recent Bitcoin crash will dent confidence for a while, but there is always something new and exciting to entice people back into the world of digital currency investment.
As it continues to be popular and things like Metaverse pick up in popularity, it becomes more likely that some sort of regulation will need to be introduced.
Currently, anyone can start an app and say that they offer Cryptocurrency trading – and if they take your money and run, there isn’t anything that can be done.
As more people opt to look into this way of investing money, the chances are that the UK Government and, indeed, governments around the world will need to work together to come up with a regulation plan.
The tricky bit will be introducing enough regulation to keep people safe without overstepping the mark and removing the anonymous feeling that Cryptocurrency currently has.
The debate of how this will work is likely to be ongoing. However, most accept that sometime in the not too distant future, we are likely to see digital currency regulation of some sort introduced in the UK.