Countries will not lead in regulation
According to the major UK financial institutions, the UK will not fight to set the global standards for crypto regulation, says Parliament’s leading crypto MP.
Dr Lisa Cameron MP has been a Member of Parliament for the Scottish National Party since 2015. She currently chairs the All-Party Parliamentary Group (APPG) on Crypto and Digital Assets.
Speaking exclusively to BeInCrypto, she says the industry only became an area of interest after a component lost money in a scam around 18 months ago. Her constituent asked her to look up who was doing the cryptocurrency work in Parliament, and it turns out there was nobody. “I had my researcher look into the sector and discovered that millions of our constituents were involved.”
Dr Cameron liaised with the industry body, Crypto UK, to set up an APPG on cryptocurrencies and digital assets. Hopes to provide a framework for parliamentary scrutiny and policy development.
APPGs help MPs and peers from different parties work together to discuss issues, propose policies and start debates in Parliament. Any MP or Peer can create one and do things like meet, ask questions, write reports and invite experts to give evidence. They are not an official part of parliament, but can still influence government decisions and how parliament works.
“It came very much from a position of consumer protection and redress, and it’s still very much at the heart of what we do.”
The UK will not be the first to regulate
As a global financial hub, there is often pressure on the UK to be an international standard setter for the rest of the world. London is still considered the number two financial centre. But there is a sense that the UK is lagging behind when it comes to regulating digital assets.
“I worked a bit with the EU and MiCA and how far ahead they were. I didn’t want Britain to fall behind.” But when she spoke to the Bank of England, the government and the Treasury, they had other ideas about how fast Britain should go. “There are advantages to being second or third in terms of looking at what’s working, leveraging that and fixing something that might not be working.
Has Brexit had a negative effect on the UK’s crypto economy? She pauses for a moment before saying: “look, I didn’t vote for Brexit, but we are where we are. I just take care of the practical stuff.”
“It gives the opportunity for the UK to create a bespoke regulatory system. Which is a bit more work for us, but we can take advantage of some of those opportunities and hopefully capitalize on the Prime Minister’s vision of the UK becoming a crypto hub.”
Is UK Crypto a ‘Wild West’?
Not everyone in the UK is as open to the crypto industry as Dr Cameron. Last month, the head of the Treasury Select Committee referred to UK crypto as “the Wild West”. The comments came after 85% of all crypto firms that applied for registration with the Financial Conduct Authority (FCA) failed to meet minimum anti-money laundering and anti-terrorism standards.
The incoming head of the FCA, Ashley Alder, recently told the Treasury Select Committee that crypto platforms were “deliberately evasive”. Also how large organizations within the industry are complicit in money laundering on a large scale.
Reflecting on the latest comments, Cameron says there is an element of mixed messages.
“On the one hand, you have such statements. And then, on the other hand, you’ve got the Prime Minister saying he wants the UK to become a cryptocurrency hub. So what I have to do in my job, as the leader of the group, is try to square that circle.”
“Yes, we need consumer protection. With FTX and all, some people can be scammed, like my own voter. So for some people, yes, it can be a wild west, so I agree with that. But that is why we must have a set of regulations. Once we have the kind of framework that gives confidence to consumers and investors, that’s when we can exploit the opportunities and the potential.”
The politician knowledge gap
During Cameron’s fireside chat, she shared an incident where she had to explain to an MP that “fiat” did not refer to a car. She expressed concern about the knowledge gap among UK lawmakers regarding this complex and evolving sector, painting a worrying picture.
“At the start of this journey there was very limited knowledge,” she says.
“In parliament we tend to be mainly generalists. So you will understand that there are many debates that happen every day in Parliament and we can talk about several issues. We tend to have knowledge about a lot of things, but it’s not really domain specific.”
“When I started looking at who was doing the work in parliament and when it had been talked about and there hadn’t been any debates about the sector at all.”
“This year we’ve had two,” she tells me at the end of February, sounding pleased. – We have received many questions for the minister, and we have received statements from the government. So you know, we have a lot of momentum now.”
Although Cameron herself is modest about her own knowledge and emphasizes the learning journey she herself has been on. “MPs have come from a limited knowledge base, and I include myself in that,” she tells me with her hand on her chest and a smile as her parliamentary assistant passes her lunch. “We have had to upgrade ourselves. This sector is not something you can just pick up a handout and talk about in parliament. You need an educational program first.”
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