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?
