In a new report, the Treasury Select Committee has called for greater regulation of cryptocurrencies and crypto-assets.
Cryptocurrency functions as a means of payment for goods and services. However, this type of payment differs from traditional methods, as cryptocurrency payments can be transferred electronically between users, without the involvement of intermediaries , such as banks.
Within the report, the Committee stated that the cryptocurrency industry is comparable to the Wild West , and called for stringent regulations to be introduced in order to combat issues such as volatile prices, hacking and minimal consumer protection.
The Treasury Select Committee has urged the government to introduce new laws to improve customer outcomes, enable sustainable growth and reduce certain risks , and make standards compulsory.
This unregulated industry leaves investors facing numerous risks, said Nicky Morgan, Chair of the Treasury Select Committee.
Given the high price volatility, the hacking vulnerability of exchanges and the potential role in money laundering, the Treasury Committee strongly believes that regulation should be introduced.
If the government decides that crypto-asset growth should be encouraged, appropriate and proportionate regulation could see the UK become a global centre for this activity.