The U.K. Treasury on Thursday announced that it is launching an inquiry into digital currencies and distributed ledger technology (DLT).
The inquiry has been launched by Treasury Select Committee and will look into 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 also assess the potential impact of DLT on financial institutions and infrastructure.
"This inquiry comes at the right time, as regulators and Governments wrestle with recent events in cryptocurrency markets. New technology offers the economy potential gains, but as recently demonstrated, it may also bring substantial risks,” Alison McGovern MP, Member of the Treasury Committee, said. “It is time that Whitehall and Westminster understood cryptocurrency better, and thought more clearly about the policy environment for blockchain technology."
In addition, the committee will also examine 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.
"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,” Rt Hon. Nicky Morgan MP, Chair of the Treasury Committee, said. “Striking the right balance between regulating digital currencies to provide adequate protection for consumers and businesses, whilst not stifling innovation, is crucial. As part of the inquiry, we will explore how this can be achieved."
