Is the NLP’s criticism of the UK government’s crypto policies correct?
The United Kingdom’s National Liberal Party has recently criticized the UK government for not having a more straight forward policy about regulating cryptocurrencies.
The main point of the post was that the UK population had absolutely no support from the Financial Conduct Authority, the financial regulator of the UK in case they were scammed or defrauded from their investments in any unregulated cryptocurrencies.
The NLP was fast to point out that Bitcoin, Ethereum and Litecoin are all considered as unregulated cryptocurrencies in the country. Considering the fact that the UK has one of the largest trading volumes of these coins, it’s easy to see why the party was so concerned.
But despite their criticism carrying some kind of truth behind it, was it correct in the grand scheme of things, or was it just a political power move and populism in action?
The UK still has a comprehensive crypto regulation
The United Kingdom is one of the few European countries that have very extensive legislation on regulating cryptocurrencies. But saying it is also incorrect. The Country has legislation for regulating crypto companies rather than the assets themselves, which need to be differentiated.
But since these crypto companies are the only ones allowed to handle cryptocurrencies in a monetary fashion, it’s safe to say that the regulation also touches Bitcoin, Ethereum and other cryptos as well.
In this sense, it’s easy to see the misunderstanding from NLP’s part, but still, they made some relevant points.
There are several offshore experts that have commented on the post from NLP already, criticizing the party for wanting a complete, unilateral regulation.
Stephan Dover from casino blik gambling blog team commented:
“NLP’s criticism of the FCA can be understood in a sense. If the crypto companies are under a regulatory framework, and that framework needs to span over to the assets themselves as well, but the issue is that should that happen, it’s very likely for the FCA to classify everything as security tokens.
Right now, there are multiple industries that are using utility tokens on their platforms in order to provide some kind of value to their users. Be it the speed of transactions or the fees on said transactions, it’s easy to see that these tokens are not designed to make the company, nor the user any money.
Should there be a unilateral regulation of cryptos, these companies would have to register their tokens as securities, which comes with quite a lot of costs, then add to that the reporting process, the screening process, the “profit” calculation process and you get millions wasted in a very minor feature. Before long, these companies will simply get rid of these utility tokens which is going to hurt crypto adoption overall.”
There is some sense in Dover’s comment. If we look back a bit, we can see the FCA contemplating a ban on cryptocurrency CFDs, because they thought they carried much more risk than other assets. Should there be a unilateral regulation of coins like Bitcoin and Ethereum, it’s quite possible that minor altcoins designed to be just utility tokens on a specific platform would become redundant, therefore inhibiting the industry’s chances at advancement.
Is the NLP’s idea of a crypto fund utopian?
The National Liberal Party also commented that the government should reimburse every UK crypto investor that has lost more than they’ve gained through cryptocurrencies. Naturally, it’s impossible to filter all of these people thanks to the sheer number of existing coins, and the ones that are now gone.
However, they did have a good point about a crypto fund. Basically, the NLP said that the government should have a fund that will be filled by crypto exchanges and the government themselves. This will act as the “refund policy” of the new regulation.
Furthermore, they suggested that several transactions be taxed and be directed to the fund. This idea is not utopian or revolutionary, it’s, in fact, the same strategy that many third-generation blockchain projects use.
The most primary example is Cardano that has a treasury it fills through fees on transactions. It then uses those fees to fund developers that want to upgrade the system.
Will anybody listen to the NLP?
It’s highly unlikely that the NLP’s criticism will even reach the higher-ups in the UK government, especially when the country is so preoccupied with Brexit looming over the horizon.
Furthermore, cryptos are not at a point in the UK, where political campaigns can be based on them. Blockchain? Sure, but for cryptos, it’s a bit early.
Therefore, I think that the NLP chose the wrong time for their criticism. The post should have been made post-Brexit as it would be much “louder”.
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