Crypto Asset Technology

Lord Vaizey of Didcot Excerpts

Thursday 21st July 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, it is not necessarily the Government’s position that crypto assets offer a better means of exchange, but they represent part of a trend of rapid innovation in financial technology. That is something we want to encourage, particularly because of some of the technology underlying some crypto assets. But the noble and learned Lord is right that they also pose risks to consumers. That is why we have already taken action on, for example, financial promotions of crypto assets and are looking at the wider question of crypto asset regulation in a consultation later this year.

[Lord Vaizey of Didcot (Con)]

My Lords, I refer to my registered interests, particularly my work with Bifinity. The UK has no crypto unicorn. In fact, the one crypto unicorn founded in the UK has now moved abroad. Even Austria has a crypto unicorn. It is a tragedy that the FCA is not working harder to regulate crypto companies, which would provide much better protection for consumers. Given that successive Chancellors of the Exchequer have quite rightly said that the UK, with its history of prudential financial regulation, should be a hub for crypto, can the Minister update me on when we are likely to see progress on the regulation of crypto companies?

[Baroness Penn (Con)]

I would like to reassure my noble friend that we are taking a staged and proportionate approach to crypto asset regulation that is sensitive to the risks posed but also responsive to new developments in the market. I have referred to a number of areas in which we have already regulated for crypto assets, and in the forthcoming Financial Services and Markets Bill we will legislate to regulate stablecoins. Later this year, we will also consult on the wider regulation of the sector. I absolutely agree with him about the opportunities this market can provide for the UK economy.