The crypto-asset industry: inquiry

AAT does not believe that regulation of cryptocurrencies in the UK is currently sufficient. Furthermore, enforcement of existing regulations remains a considerable challenge too.

Cryptocurrencies continue to be viewed by consumers primarily as an investment vehicle rather than what they were designed for, ie a payment method. This means that their widespread usage as an everyday payment method appears highly unlikely in either the short or medium term.

Distributed ledger technology is already being utilised in some areas of the accountancy sector. However, the possibilities for its successful widespread adoption in both the accountancy and financial industries are considerable and remain largely untapped.

Central Bank Digital Currencies (CBDCs) represent a very different proposition to private cryptocurrencies. As a result, they may well prove to be a more acceptable and popular payment method.

Dozens of countries have banned the use of private cryptocurrencies due to concerns around money laundering and financial stability. However, some of these countries have simultaneously invested in developing their own CBDC, most notably China.

Widely reported concerns about the negative environmental impact of cryptocurrencies, especially Bitcoin, need not hamper the development of CBDCs. This is because such concerns can largely be eliminated at the design stage.