To understand the potential ‘opportunities and risks’
UK Treasury has today launched an inquiry into cryptocurrencies and the technology — referred to as ‘the blockchain’ — behind them in an effort to set the framework in motion for regulation in the future.
The Treasury Committee said it wants to understand the potential “opportunities and risks” for consumers, the business community and government.
Nicky Morgan, chair of the of the committee, said the MPs would look into how consumers and Britain’s financial infrastructure might be better protected, without stifling innovation.
Morgan said: “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.
“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.
“We will also examine the potential benefits of cryptocurrencies and the technology underpinning them, how they can create innovative opportunities, and to what extent they could disrupt the economy and replace traditional means of payment.”
But she also wants to strike a balance between protection and regulation, and not hindering the blockchain technology behind cryptocurrencies. “As part of the inquiry, we will explore how this can be achieved,” she said.
Established in 2009 after the financial meltdown, Bitcoin is a digital currency that has no central bank or regulatory authority backing it up. The digital coins are stored in a digital wallet or on the cloud and can be used in transactions.