Andrew Griffith reaffirmed that it is the aim of the government to make the UK the home of technologically advanced and well-regulated financial systems.
But, the city minister also added that it was highly unlikely that regulation for cryptocurrencies in the United Kingdom would be ready this year.
Crypto industry
There was a Treasury committee hearing scheduled on Tuesday in which MPs questioned the city minister about the risks to the crypto industry.
They also asked Griffith about the progress of crypto regulation in the UK. He outlined the government’s strategy and said that two public consultations would be introduced in weeks.
The first public consultation would be about the general regulatory approach to be taken for dealing with crypto assets.
The second public consultation would be focused on the topic of central bank digital currencies (CBDCs).
He said that when it comes to predicting future technologies, it is necessary to be humble. But, he added that it would be wrong on the part of the UK to not move forward and take advantage of the opportunity.
Nonetheless, he admitted that it was unlikely that they would be able to introduce legislation for the crypto industry in 2023.
The risks
Griffith said that he did not appreciate the criticism about spending time on the crypto industry because they were not doing anything wrong.
Yet, he admitted that the sector has a range of risks. Since April of last year, these risks have become a lot more prominent.
At that time, Rishi Sunak, who had been Chancellor, had said that he wanted to make the United Kingdom into a global hub for cryptocurrencies.
A number of people are now doubting the future of the crypto industry because of the various collapses that happened in 2022, which ended with the downfall of FTX.
UK’s stance
The city minister seemed to be reluctant to talk about whether he was concerned or pleased to know that there were 2.3 million in the country who own some type of crypto asset, given the concerns.
Emma Hardy, a Labour MP, questioned Griffith about it and he responded that he would be pleased to know that these 2.3 million people had invested in these crypto assets while being aware of the risks involved.
He said that he would be happy if they were prepared for the consequences if these speculative investments don’t turn out to be in their favor.
The Deputy Director of Payments and Fintech, Laura Mountford also highlighted figures from the Financial Conduct Authority (FCA).
She said that the numbers showed that out of the 2.3 million who had made crypto investments, 40% of them were aware that buying these assets was nothing more than a gamble.
Griffith also expressed concerns that introducing regulations for crypto assets could also have a ‘halo effect’, which means that they would appear to be a lot safer than they would really be.
Therefore, he said that they would take their time in developing proper crypto regulations.
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