The chair of the cryptocurrency trade body, CryptoUK, has warned politicians that the UK risks missing out from the global cryptocurrency economy if it fails to bring the sector within the remit of financial services regulation.

Iqbal V. Gandham - who is also UK managing director of eToro - gave evidence yesterday to the Treasury Select Committee, calling on government to take a straightforward, light-touch approach to regulation, by bringing cryptocurrency exchanges within the remit of the Financial Services and Markets Act.

Commenting afterwards, he explained that regulating the points where cash is converted to crypto and visa versa is a simple solution to the serious concerns currently tarnishing this technology.

“It offers a clear means to tackling illegal activity and protecting consumers, whilst enabling the best of this industry to flourish,” stated Gandham. “But government must act quickly, as without regulation, the UK risks falling behind the rest of the world.

“We made this mistake to our cost 25 years ago with the rise of the internet – the UK economy cannot afford to do so again,” he concluded. “Regulatory certainty is crucial to promoting innovation for the future”.

The Select Committee launched its inquiry in February, with chair Nick Morgan stating that people are becoming increasingly aware of cryptocurrencies such as Bitcoin, but they may not be aware that they are currently unregulated in the UK, and that there is no protection for individual investors.

A variety of industry stakeholders have given evidence so far, with Martin Walker, director at non-profit group the Center for Evidence-Based Management, stating that the distributed ledger technology that underlies blockchain has “little to nothing” in terms of demonstrable benefits, comparing it to “magic wands and pixie dust”.

Meanwhile, Simon Wax, partner at accountancy and advisory firm Buzzacott, commented that the debate over blockchain highlights a fundamental challenge with ‘hyped’ technologies that FinTech firms come up against when they’re looking to grow.

This was backed up by a report from law firm Gowling WLG, which stated that while an estimated $2.1 billion will be spent on blockchain solutions during 2018, wider adoption of the technology could be significantly delayed by the damaging news currently associated with cryptocurrencies.

Just this week, the Bank for International Settlements weighed in on the cryptocurrency trend, stating that they are an “environmental disaster” and have the potential to “bring the internet to a halt”.

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