The United Kingdom’s Treasury Select Committee, a cross-party team of members of parliament, is launching an inquiry into cryptocurrency and blockchain in an effort to understand the technology.
The Treasury Committee said it wants to examine the role of cryptocurrencies in the UK, including the risks they pose to consumers, business and the government. They will also examine the potential impact of blockchain technology on financial institutions, including the Bank of England, and financial infrastructure.
“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,” said Nicky Morgan, Chair of the Treasury Select Committee. “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.”
Morgan added that the committee will also examine the potential benefits of cryptocurrencies and blockchain technology, how they can create innovative opportunities, and to what extent they could disrupt the economy and replace traditional means of payment.
“Striking the right balance between regulating digital currencies to provide adequate protection for consumers and businesses, whilst not stifling innovation, is crucial,” Morgan said. “As part of the inquiry, we will explore how this can be achieved.”
The Treasury Committee’s inquiry comes within months of the UK Treasury weighing up wider regulation and taxation policies for crypto exchanges and users. In December, the British government revealed plans to introduce strict regulations of cryptocurrencies like bitcoin to combat crime like tax evasion and money laundering.
At the time, a Treasury spokesperson said: “We have clear tax rules for people who use cryptocurrencies, and like all tax rules, these are kept under review. We also intend to update regulation to bring virtual currency exchange platforms into anti-money laundering and counter-terrorist financing regulation.”
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