The Treasury Committee of the UK parliament has announced that they will begin an inquiry into cryptocurrency and blockchain to understand the risks, benefits and regulatory measures involved. Beyond cryptocurrency, the inquiry will seek to understand the impact of distributed ledger technology on banks and the entire financial structure.
Chair of the Treasury Committee, Rt Hon. Nicky Morgan MP, explained that though the British public is getting more acquainted with Bitcoin and other cryptocurrencies, they may not know that cryptocurrencies are unregulated in the country. This means that individual investors are currently unprotected. This is the reason the committee is seeking to access risks these digital currencies may pose to consumers, businesses, and governments. His team will also look at matters relating to volatility, money laundering, and cybercrime.
Morgan hinted at the kind of regulation that may be expected from the inquiry. He said, “Striking the right balance between regulating digital currencies to provide adequate protection for consumers and businesses, while not stifling innovation, is crucial. As part of the inquiry, we will explore how this can be achieved”
A member of the committee, Alison McGovern MP commented on the timing of the bill stating that it was “time that Whitehall and Westminster understood cryptocurrency better, and thought more clearly about the policy environment for blockchain technology.”
The emergence of cryptocurrencies and its underlying blockchain technology has forced governments and businesses alike to rethink their policies and strategies. While some countries have a very tough stance like an outright ban on China others have taken a more relaxed approach. Japan for instance accepted cryptocurrencies and put a regulatory system in place. Either path has its benefits and risks hence an inquiry by the UK parliament.
Several governments are working on new laws to promote blockchain technology and even woo blockchain startups.
Solomon Sunny is the market reporter for Smartereum, one of the global leaders in Ethereum, blockchain and currency news. He produces technical price updates on digital currencies and writes recent developments about blockchain.