CryptoUK is the first self-regulatory trade association for the UK cryptocurrency industry, established to promote higher standards of conduct, and has just informed that it has welcomed the UK government Digital Currencies inquiry.
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.
It will examine the potential impact of distributed ledger technology—such as blockchain—on financial institutions, including the central bank, and financial infrastructure.
It will also scrutinise 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.
Terms of Reference
This inquiry will examine the use of digital currencies and distributed ledger technology in the UK. The inquiry will cover:
- The role of digital currencies in the UK, including the opportunities and risks digital currencies may bring to consumers, businesses and the Government (and associated bodies).
- The potential impact of distributed ledger technology on financial institutions, including the central bank, and financial infrastructure.
- The regulatory response to digital currencies from the Government, the FCA and the Bank of England in relation to Anti-Money Laundering legislation and how regulation could be balanced to provide adequate protection for consumers and businesses without stifling innovation.
Some of the key questions the Committee will consider in this inquiry include:
- Are digital currencies ultimately capable of replacing traditional means of payment?
- To what extent could digital currencies disrupt the economy and the workings of the public sector?
- What risks and benefits could digital currencies generate for consumers, businesses and governments?
- How is distributed ledger technology being applied in the financial services sector, and how might it be applied in future?
- What work has the Government (and its associated bodies) done to understand, prepare for and, where relevant, encourage changes that may be brought about by increased adoption of digital currencies?
- How might the Government’s processes adapt should digital currencies be adopted more widely (e.g. tax implications, anti-money laundering measures)?
- Is the government striking the right balance between regulating digital currencies to provide adequate protection for consumers and businesses whilst not stifling innovation?
- Could regulation benefit digital currency start-ups by improving consumer trust?
- How are governments and regulators in other countries approaching digital currencies and what lessons can the UK learn from overseas?
Commenting on the Treasury Select Committee’s decision to launch an inquiry into digital currencies, a spokesperson for CryptoUK said:
We welcome the decision by the Treasury Select Committee to launch this inquiry and look forward to contributing. As some of the leading businesses in the cryptocurrency industry we believe that under the right regulatory framework, there is an opportunity for the UK to become a global leader in this exciting technology. Our message to the Treasury Select Committee is that it is entirely possible to deliver a regulatory framework which ensures consumer protection and which enables crypto businesses to thrive.