According to a report published by the Telegraph today, experts have warned the UK government against attempts to tighten grip on cryptocurrency. The report says that parliament’s plan to clamp down on crypto-related illegitimate activities is “ashamedly geared around Bitcoin ” and could criminalize any other type of digital asset.
Companies will move overseas
Patrick Curry, CEO of the British Business Federation Authority, stated that inappropriate regulations could drive cryptocurrency investors away, thereby harming the country’s position as the world’s leading financial center.
Following calls for the government to extend the powers of financial market regulators, cryptocurrency exchange TodaQ, venture capital fund Novum Insights, law firm Baker Botts, and The BBFA recently released a joint report. The report argues that “bad regulation is worse than no regulation at all.”
“It is a very blunt instrument approach and I haven’t seen this in other countries. The use of this technology is still a voyage of discovery and these technologies are being refined for different types of use. My concern is the law of unintended consequences,”Mr. Curry told the publication.
Regulations will improve liquidity
Though the report warns of the disastrous ramifications likely to result from implementing virtual currency regulations, the Treasury Committee report had argued that such an action could contribute to enhancing liquidity in the sector.
“If the government decides that crypto-asset growth should be encouraged, appropriate and proportionate regulation could see the UK become a global center for this activity.”
Law drafting in progress
Her Majesty Revenue Customs, the Bank of England, and the Financial Conduct Authority are currently working together to propose new regulations.
Last month the country’s Treasury Select Committee published a report which called for cryptocurrency regulation. While the report said cryptocurrencies are speculative assets rather than a currency, it didn’t rule out Britain opening its shores to cryptocurrency startups.