Country Will Not Lead in Regulation

According to the big British economic institutions, the UK won’t be racing to set the global standards on crypto regulation, says the Parliament’s leading crypto MP.

Dr. Lisa Cameron MP has been a Member of Parliament for the Scottish National Party since 2015. She is currently Head of the All-Party Parliamentary Group (APPG) on Crypto and Digital Assets. 

Speaking exclusively to BeInCrypto, she says the industry first became an area of interest after a constituent lost some money in a scam around 18 months ago. Her constituent asked her to look up who was doing the work on cryptocurrency in the Parliament, and it turned out there was nobody. “I got my researcher to look into the sector and discovered that millions of our constituents were involved.”

Dr. Cameron contacted the industry body, Crypto UK, to set up an APPG on cryptocurrencies and digital assets. Hoping to provide a framework for parliamentary scrutiny and policy development. 

APPGs help MPs and Peers from different parties work together to discuss issues, suggest policies, and start debates in Parliament. Any MP or Peer can create one and do things like meet, ask questions, write reports, and invite experts to give evidence. They’re not an official part of Parliament but can still affect government decisions and how Parliament works.

“It came very much from a position of consumer protection and redress, and that’s still very much at the heart of what we do.”

The UK Won’t Be First In Regulation

As a global financial hub, there is often pressure on the UK to be an international standards setter for the rest of the world. London is still considered the number two financial center. But there is a feeling that the UK is falling behind on digital assets regulation.

“I was doing a bit of work on the EU and MiCA and how far ahead they were becoming. I didn’t want the UK to fall behind.” However, when she spoke to the Bank of England, the Government, and the Treasury, they had other ideas about how fast the UK should go. “There are advantages to being second or third in terms of looking at what works that capitalizing on that and fixing anything might not be working.

Has Brexit had a negative effect on the UK’s crypto economy? She pauses for a moment before saying: “look, I didn’t vote for Brexit, but we are where we are. I just deal with the practicalities.”

“It does give the opportunity for the UK to create a bespoke regulatory system. Which is a bit more work for us, but we could capitalize on some of those opportunities and hopefully harness the prime minister’s vision of the UK becoming a crypto hub.”

Is UK Crypto A “Wild West”?

Not everyone in the UK is as open to the crypto industry as Dr. Cameron. Last month, the chair of the Treasury Select Committee referred to UK crypto as the “Wild West”. The comments came after 85% of all crypto firms that applied for registration with the Financial Conduct Authority (FCA) failed to meet minimum standards for money laundering and counter-terrorism. 

The incoming chair of the FCA, Ashley Alder, recently told the Treasury Select Committee that crypto platforms were “deliberately evasive.” Also, how large organizations within the industry are complicit in money laundering on a large scale.

Reflecting on the recent comments, Cameron says there’s an element of mixed messaging.

“On the one hand, you have statements like that. And then, on the other hand, you’ve got the Prime Minister saying that he wants the UK to become a hub of cryptocurrency. So what I have to do in my job, as chair of the group, is try to square that circle.”

“Yes, we need consumer protection. With FTX and everything, some people can be scammed, like my own constituent. So for some people, yes, it can be a Wild West, so I agree with that. But that’s why we need to have a regulatory framework. Once we have that type of framework that gives confidence to consumers and investors, that’s when we can harness the opportunities and potential.”

The Politician Knowledge Gap

During Cameron’s fireside chat, she shared an incident where she had to explain to an MP that “fiat” didn’t refer to a car. She expressed concern about the knowledge gap among UK legislators regarding this complex and developing sector, painting a worrisome picture. 

“At the start of this journey, there was very limited knowledge,” she says.

“In Parliament, we tend to mainly be generalists. So you’ll understand there are many debates happening every day in Parliament, and we can be speaking on multiple issues. We tend to have knowledge about lots of things, but it’s really not domain specific.”

“When I started looking into who was doing the work in parliament, and when it had been spoken about, and it hadn’t had any debates on the sector at all.” 

“This year, we’ve had two,” she says to me in late February, sounding pleased. “We’ve got a lot of questions to the minister, and we’ve had statements from Government. So, you know, we have a lot of momentum going now.”

Although Cameron herself is modest about her own knowledge and emphasizes the learning journey she herself has been on. “MPs have come from a limited baseline of knowledge, and I include myself in that,” she tells me, hand on her chest, smiling as her parliamentary aide passes her lunch. “We’ve had to upskill ourselves. This sector is not something that you can just pick up a handout and speak in Parliament about. You need an educational program first.”