From being seen as a small “anti-establishment rebellion asset” more than ten years ago, crypto has grown to “become more widespread,” says Sarah Pritchard, an executive director at the United Kingdom’s Financial Conduct Authority (FCA). Pritchard said while the FCA has routinely warned consumers of risks associated with crypto, the watchdog has “always been open to innovation.”
Few Customers Know About Crypto
According to Sarah Pritchard, an executive director of markets at the Financial Conduct Authority, crypto has evolved from being seen as “an anti-establishment rebellion asset” more than ten years ago, to one that “has become more widespread.” However, Pritchard insisted in her April 25 speech that just a few “consumers know what it is, how it works and what they are getting into.”
The executive director also suggested that as “this once alternative investment becomes more popular,” stakeholders will eventually be forced to sit down and “debate about risk, mitigation and the limits of regulation.” Pritchard said it had been “instructive” to watch U.S. regulators respond to the collapse of the crypto exchange FTX.
Although the FCA has routinely issued warnings to individuals dealing with cryptocurrencies, according to Pritchard such a stance should not imply that the watchdog is against innovation.
“While we have been relentless about warning that consumers need to be prepared to lose all their money if buying crypto-assets – and actually issued a warning a week before FTX collapsed about its unauthorised operation in the UK – we have always been open to innovation,” the executive director said.
Crypto Industry Needs Mature Participants
To support the assertion that the FCA is not against innovation, the executive director pointed to how crypto-assets and the blockchain enable faster and cheaper cross-border transactions. According to Pritchard, a more efficient cross-border payment method can potentially boost as well as support international trade. The same method might also be the most ideal for a global workforce because it enables them “to send money to friends and family overseas” more quickly.
Meanwhile, the executive director said as the crypto industry becomes more mature it also becomes imperative for industry players to change their ways. She also warned that crypto “has a high risk of exploitation by serious organised criminals” and this necessitates the need for a “regulatory regime [that] strikes an appropriate balance.”