Cryptocurrencies

Lord Haskel Excerpts

Wednesday 2nd March 2022 Lords Chamber

Asked by

[Lord Haskel]

To ask Her Majesty’s Government what steps they are taking to regulate and supervise the use of cryptocurrencies.

[Baroness Penn (Con)]

Her Majesty’s Treasury and UK authorities have taken a series of actions to support innovation while mitigating risks to stability and market integrity. These include launching a new anti-money laundering and counterterrorist financing regime for crypto assets in 2020, and consulting on a proposal to ensure that crypto assets, known as stablecoins, meet the same high standards expected of other payment methods. The Government will issue our response to this consultation shortly. In January, the Government announced our intention to legislate to bring certain crypto assets into the scope of financial promotions regulation, requiring them to be fair, clear and not misleading.

[Lord Haskel (Lab)]

I thank the Minister for her response, which certainly deals with the marketing and promotion of crypto but does not deal with its actual use. For example, as reported in today’s Financial Times, crypto is being used as a way round the financial sanctions against Russia and can be used to get round the controls of the proposed economic crime Bill. Does the Minister agree with the Financial Stability Board that this poses a risk to the stability of traditional currencies and public security? Will the Government listen to these concerns and apply strong, prudential controls? Most importantly, will they give agencies the resources and powers to enforce controls, and, for example, call on the G20 to co-ordinate international regulation and supervision?

[Baroness Penn (Con)]

In my original Answer I did not only talk about the financial promotion of crypto assets; I also talked about the regulation of stablecoin. In response to the noble Lord’s point about the anti-money laundering regulations and counterterrorist financing regulations which apply to crypto assets, I would like to reassure noble Lords that the regulations imposing sanctions on Russia apply to crypto assets. Legislation being introduced this week in the economic crime Bill will give the Office of Financial Sanctions Implementation the powers it needs to enforce financial sanctions.