The government has been urged to step in to protect consumers from the "Wild West" world of cryptocurrencies.

The cross-party Treasury Select Committee said in a report today that the lack of rules governing the use of assets like Bitcoin and Ethereum risked "volatile prices, hacking vulnerabilities, minimal consumer protection, and anonymity aiding money laundering".

More than 1,500 cryptocurrencies are currently being traded around the world, but some assets have been subject to wild swings in value as individual investors look to make a quick profit.

The committee's report warned that the industry is currently reliant on "wholly voluntary" codes of conduct to govern its behaviour, as they called for the UK's city regulator to be given fresh powers to shield consumers.

"As the government and regulators decide whether the current Wild West situation is allowed to continue, or whether they are going to introduce regulation, consumers remain unprotected," they said.

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The MPs said "proportionate" regulation could allow the UK to become a "global centre" for cryptocurrencies, which advocates say can offer a much more secure medium of exchange than conventional currencies.

They say that the quickest method of reform would be to update the Financial Conduct Authority’s Regulated Activities Order so that it has the legal power to execute its duties of protecting consumers and maintaining market integrity extended to cryptocurrencies.

Launching the report, committee chair Nicky Morgan called on ministers to act now to tame "the Wild West industry of crypto-assets".

She added: "This unregulated industry leaves investors facing numerous risks. Given the high price volatility, the hacking vulnerability of exchanges and the potential role in money laundering, the Treasury Committee strongly believes that regulation should be introduced. It's unsustainable for the government and regulators to bumble along issuing feeble warnings to potential investors, yet refrain from acting.

"At a minimum, regulation should address consumer protection and anti-money laundering. If the government decides that crypto-asset growth should be encouraged, appropriate and proportionate regulation could see the UK become a global centre for this activity."

The report was welcomed by Iqbal Gandham of industry body CryptoUK, who said: "Self-regulation by the industry was always intended to be a starting point – this must now be matched by government action. Regulatory oversight is essential to ensuring consumer safety, guarding against malpractice and providing much-needed clarity to an industry that is fast maturing."