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UK bipartisan group launches inquiry on digital asset regulations

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A bipartisan group in the U.K. parliament has launched an inquiry on digital assets, inviting feedback on regulations and central bank digital currencies (CBDC) as well as the role of the country’s financial watchdogs in the blockchain world.

The Crypto and Digital Assets All Party Parliamentary Group (APPG) is made up of 11 members of parliament and chaired by Lisa Cameron, the MP for East Kilbride, Strathaven, and Lesmahagow.

In its announcement, the APPG called for public feedback on the U.K.’s current regulatory approach toward digital assets. The country has yet to issue a definitive regulatory framework for the industry, with most VASPs currently borrowing from the existing financial regulations.

Regulators in the country have also been handling the industry on a case-by-case basis, and this will be the other area that the APPG is seeking to collect feedback on. The group wants to know the role of the Financial Conduct Authority (FCA), which has become the de facto regulator for the industry, the Bank of England, as well as the Advertising Standards Authority, which has cracked down on a number of entities for misleading ads.

Other areas the group is interested in getting feedback on are:

  • The U.K.’s government plan to make the country a global home of digital asset investment.
  • The potential of CBDCs.
  • The potential risks in terms of consumer protection and economic crime.

APPG called on feedback from digital asset operators, industry experts, regulators, and government officials. They can submit written submissions until September 5.

The findings of the group will be passed on to the government and the Treasury Select Committee in parliament. They will play a key role in the direction that the U.K. will take in regulating digital assets.

“As part of its inquiry the APPG will investigate the state of the U.K. crypto sector and recent concerns raised around financial crime and advertising. It will consider the growth of crypto over recent years and the need for regulators and government to keep pace with the rapid advancements in innovation and technology, as well as considering whether enough is being done in terms of consumer protection,” Chair Cameron stated, commenting on the role of her group.

Like most other countries, the U.K. is grappling with the rapid growth of the digital assets industry. The FCA has made the biggest strides, stretching from cracking down on scammers to policing digital asset ads.

In July, the Finance Minister introduced the Financial Services and Markets Bill, perhaps the most significant move towards policing the sector. It confers the Treasury with the power to bring digital assets within the purview of the BoE if they threaten financial stability and kickstart stablecoin regulation.

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