The UK’s Financial Conduct Authority (FCA) has announced that it plans to release the results of its task force on cryptocurrency in the summer.
One of the functions of the UK government’s task force is to examine the risks of blockchain technology and mitigate these while examining the benefits of distributed ledger technology in financial services. The Crypto Assets Task Force, consisting of the UK Treasury and the FCA, has been set up for this purpose.
Chancellor Hammond’s comments at a recent Fintech conference in Australia demonstrate that the UK would open its doors to innovators and inventors, suggesting the task force as a first step towards automating financial compliance in the UK. In the context of the fintech sector, he saw it being able to “grow and flourish” in a regulatory climate that has broadly been supportive of blockchain technology and cryptocurrencies over the years.
The FCA suggests that cryptocurrencies are “an area of increasing interest for markets and regulators globally”. The discussion paper to be published this year should clarify Bank of England and Treasury views on which direction to take regarding cryptocurrency regulation.
On Friday, the authority clarified that firms offering cryptocurrency services would need to comply with new guidelines set or be prosecuted under the law. Treasury committee chair, Nicky Morgan, also made it clear that its own ongoing enquiry into cryptocurrencies would examine some of the risks and threats posed to UK consumers, as well as businesses and governments, by digital currencies.
Morgan pointed out, on a more positive note, that the committee would “examine the potential benefits of cryptocurrencies and the technology underpinning them, how they can create innovative opportunities”.
Committee member Alison McGovern suggested that the inquiry would help lawmakers and politicians educate themselves on cryptocurrencies before enforcing legislation on how the industry should conduct its business. She suggested that the UK government needed a clearer understanding of cryptocurrencies and to think more clearly about “the policy environment for blockchain technology”.