Digital Currencies Inquiry

A committee of MPs is to investigate cryptocurrencies and the like

The House of Commons Treasury Select Committee has announced an inquiry into ‘digital currencies’.

The influential committee, chaired by Nicky Morgan MP, will look at 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 aims to 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.

The Committee’s terms of reference are as follows:

  • ·        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?


Published: 2018-02-22T11:00:00

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