The British government may ban some crypto based retail financial products and greater regulation to block potentially “illicit activity” that could harm consumers and markets. The proposal was developed as part of the discussion of tightening the regulatory scheme for the digital assets market and the blockchain industry.
“The Taskforce has concluded that strong action should be taken to address the risks associated with crypto-assets that fall within existing regulatory frameworks,” the report said.
Regulator representatives note that cryptocurrencies cannot be recognized as a means of payment due to their high volatility, low liquidity and due to the fact that they are difficult to track. However, the authors of the initiative don’t deny that in the future cryptocurrencies would make transactions less expensive and the need for intermediaries would disappear completely.
Currently, according to representatives of the regulator, crypto-assets have enormous risks for investors and also contribute to the flourishing of the black market. For example, fraudsters actively and fairly successfully use cryptocurrencies to launder criminal proceeds, lawmakers say.
The report sets out milestones for scrutinizing crypto-assets more closely.
The taskforce will publish a consultation paper by the end of the year on draft guidance to clarify which crypto-assets fall within and outside the existing regulatory “perimeter,” and whether the perimeter should be extended.