UK Treasury Committee Launches ‘Inquiry’ into Cryptocurrencies

UK Treasury Committee Launches ‘Inquiry’ into Cryptocurrencies

in News
Today the UK Treasury Committee is opening a new inquiry into digital currencies and distributed ledger technology (DLT). The inquiry will cover the role of digital currencies in the UK, including the opportunities and risks that digital currencies may bring to consumers, businesses, and the Government. Besides, it will examine the potential impact of distributed ledger technology – such as blockchain – on financial institutions, including the central bank, and financial infrastructure. Moreover, it will also scrutinize the regulatory response to digital currencies from the Government, the Financial Conduct Authority, and the Bank of England, and how regulation could be balanced to provide adequate protection for consumers and businesses without stifling innovation.

Commenting on the launch of the inquiry, Rt Hon. Nicky Morgan MP, Chair of the Treasury Committee, said:

"People are becoming increasingly aware of cryptocurrencies such as Bitcoin, but they may not be aware that they are currently unregulated in the UK, and that there is no protection for individual investors. The Treasury Committee will look at the potential risks that digital currencies could generate for consumers, businesses, and Governments, including those relating to volatility, money laundering, and cyber-crime. We will also examine the potential benefits of cryptocurrencies and the technology underpinning them, how they can create innovative opportunities, and to what extent they could disrupt the economy and replace traditional means of payment. The distributed ledger technology that supports digital currencies is said to have significant transformative potential, not least within the financial services sector. Striking the right balance between regulating digital currencies to provide adequate protection for consumers and businesses, whilst not stifling innovation, is crucial. As part of the inquiry, we will explore how this can be achieved."
According to committee member Alison McGovern, today’s inquiry will help stir UK lawmakers and politicians to educate themselves on cryptocurrencies before enforcing any policies. She said:
“It is time that Whitehall and Westminster understood cryptocurrency better, and thought more clearly about the policy environment for blockchain technology.”

“This inquiry comes at the right time, as regulators and Governments wrestle with recent events in cryptocurrency markets. New technology offers the economy potential gains, but as recently demonstrated, it may also bring substantial risks," she added.

The information was provided shortly after Lord Bates clarified the position of the UK Government regarding the possible regulation of digital currency businesses. On November 21, 2017, he said that the Government was negotiating amendments to the 4th Anti-Money Laundering Directive set to bring virtual currency exchange platforms and custodian wallet providers into the scope of Anti-Money Laundering and Counter-Terrorist Financing regulation. This will require such firms to conduct due diligence upon their customers, with their activities being overseen by national competent authorities for these areas, he added. The UK Government supports the intention behind these amendments.

Do you think all the governments should discuss the cryptocurrency question? Share your opinion in the comments section below. 


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