Officials from the UK’s Financial Conduct Authority (FCA) appeared before the House of Commons Treasury Committee on March 8 to discuss the agency’s work. Among the issues raised is the regulation of cryptocurrency, which officials are tackling with little enthusiasm.
FCA chairman Ashley Alder, who took up the position in February after serving as CEO of the Hong Kong Securities and Futures Commission, told the committee that the FCA was “in the midst of a fairly ambitious reset” as the Financial Services and Markets bill made its way through parliament. He and CEO Nikhil Rathi answered questions about predatory lending, mortgage rates and a few other topics before tackling crypto in the final minutes of the hearing.
Former FCA chairman Charles Randell sent a letter to the committee saying “speculative crypto is gambling pure and simple and should be regulated and taxed.” Alder responded that globally “this will not be viewed from a regulatory perspective other than the financial regulator.” Financial regulations “should be very tough,” Alder added.
If the principle of “equal risk, equal regulation” applies to crypto businesses, Alder said:
“The interesting aspect of this is that the level of crypto has to adapt and detoxify effectively to fit into the regime.”
When asked if regulation “doesn’t legitimize” crypto, Alder replied, “I agree,” but said public policy issues such as money laundering cannot be addressed without regulation.
Related: UK FCA hints at why only 15% of crypto companies are regulated
The Financial Services and Markets Act, when passed, will give the FCA new regulatory powers over the crypto currency industry, but will not eliminate the risks posed by cryptocurrency. Rathi said, “We will not be able to create a framework that protects consumers from losses.”
On Wednesday, we will review the work @TheFCA. We will hear from Chief Executive Nikhil Rathi and Chairman Ashley Alder.
Learn more about the session https://t.co/jcmn1lrQJv pic.twitter.com/AA1Fv7prE9
– Treasury Committee (@CommonsTreasury) March 3, 2023
Most UK crypto holders have no more than “a few hundred pounds” of cryptocurrency, he added.
The Financial Services and Markets Act was introduced to Parliament in July and amended in October to expand crypto regulatory provisions.