UK Parliament opens inquiry on the role of digital currencies

Published: 26 February 2018

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The UK Treasury Select Committee has commenced an inquiry on 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 will 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.

Some of the key questions the Committee will consider in this inquiry include:

  1. Are digital currencies ultimately capable of replacing traditional means of payment?;
  2. What risks and benefits could digital currencies generate for consumers, businesses and governments?
  3. How is distributed ledger technology being applied in the financial services sector, and how might it be applied in future?;
  4. How might the Government’s processes adapt should digital currencies be adopted more widely (e.g. tax implications, anti-money laundering measures)?;
  5. Is the government striking the right balance between regulating digital currencies to provide adequate protection for consumers and businesses whilst not stifling innovation?; and
  6. How are governments and regulators in other countries approaching digital currencies and what lessons can the UK learn from overseas?

If members have any questions or comments, please contact Oliver Robinson.