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Crypto regulation should incentivise ‘financial inclusion’ says Bradford fin-tech research group


XRP cryptocurrency token

Cryptoasset regulation in the UK should promote ‘financial inclusion’ - that’s the view of Responsible FinTech Research Group (ResFinTech), based at the University of Bradford.

The recommendation was made in a response to an HM Treasury consultation on the future of crypto regulation.

ResFinTech, which is made up of financial and tech experts from the university, provided a number of responses to the consultation, one of which was to “advocate for a regulatory regime that would incentivise the use of crypto assets to improve financial inclusion.”

Dr Marizah Minhat

Commenting on the responses, Associate Professor of finance and economics Dr Marizah Minhat, pictured above, said: “As with any form of regulation, there is a need to mitigate risk, for example to the consumer. What we are saying is there is also a risk to over-regulating cryptoassets to the point where it stifles innovation.

“We are also advocating that any regulation takes into account the promotion of financial inclusion. What we mean by this is that so-called ‘un-banked’ people or groups, who may for whatever reason find it difficult to engage with traditional fiat currency-based systems, can participate. Such an approach would be in line with the United Nations sustainability goals (SDGs), which the University of Bradford has signed up to.”

The UN’s SDGs identify financial technology  (which includes cryptocurrencies) as one way of improving supply chains, promoting circular economies, and promoting ‘financial inclusion’, which would ultimately help lift people out of poverty and improve their lives by giving them access to more products and services.

ResFinTech collaborated to gather and collate responses from the contributing academics members and students of the MSc Financial Technology programme.

Dr Minhat said: “The HMT’s proposals posed 52 questions centred around a number of important crypto asset activities. These included exchange activities, custody activities and lending activities, which the government is intending to bring into the regulatory perimeter for financial services.

“ResFinTech’s responses were gathered from contributing academic members and students of MSc Financial Technology. This collaborative initiative provides evidence of the practical relevance of our academic programme where students are encouraged to participate in real policy-making discourse.”

It is also advocated for clear regulations in the crypto space to avoid confusion and potential risks for investors, including on the definition of crypto assets and the legislative approach; the territorial scope of regulated crypto asset activities; and rules on crypto asset issuance and disclosures, market abuse requirements, crypto asset lending platforms and decentralised finance.

A person holding bitcoin

Extracts from ResFinTech response to HM Treasury

ResFinTech advocated for:

  • Clear and updated regulations to prevent risks associated with investing in crypto assets while also providing investors with accurate and reliable information about the associated risks… [but added] there are concerns about stifling innovation and creating a regulatory burden to small crypto asset businesses.

  • Cryptoassets should be subject to the same rules as traditional financial instruments, particularly with regard to Anti-Money Laundering requirements.

  • A unified regulatory framework to balance investor protection and innovation.

  • Minimum capital requirements for crypto lending platforms, insurance, clear lending platform rules, regular audits, and KYC/AML (Know Your Customer/Anti Money Laundering) procedures to prevent future occurrences of losing confidence in crypto market. 

  • Regulators should differentiate between crypto ‘lending’ and ‘staking’

  • Consider the introduction of a carbon tax on crypto mining


In April 2022, the government committed to introducing a new regulatory regime for crypto assets, reflecting the risks and opportunities the new class of assets present.

On 1 February 2023, the HM Treasury published proposals for this future regime, which marks the next phase of the government’s approach to regulating crypto assets. It builds on previous proposals that focussed on stablecoins and the financial promotion of crypto assets.

The proposals seek to deliver on the ambition to place the UK’s financial services sector at the forefront of crypto asset technology and innovation and create the conditions for crypto asset service providers to operate and grow in the UK, whilst managing potential consumer and stability risks.

XRP cryptocurrency token

Crypto conference on June 12

On 12 June, ResFinTech will be hosting a one-day event covering digital assets, cryptoassets and CBDCs (central bank digital currencies) at the Chartered Accountants’ Hall, London.

Dr Minhat said: “Crypto asset markets continue to develop with increasing pace and complexity. That brings risk but also opportunities. We have seen a growing number of events hosted to promote commercial interests in this area. While we support commercial activities and the plan to make Britain a global hub for crypto asset technology and investment, we are mindful of the risks.

“To help grow the markets with public interest in mind, we acknowledge risk taking as part of the cycle of innovation and we wish to engage in discourse with stakeholders in formulating ways to prudently manage the risks.”

The event features speakers from diverse professional backgrounds. ResFinTech received support from the Digital Assets Working Party of the Institute of Chartered Accountants in England and Wales in identifying suitable participants, including representation from accounting practitioners, industry players and regulators.