The UK Treasury has announced that it is launching an inquiry into cryptocurrency and its technologies, namely the impacts it could have on UK businesses and investors.
With the cryptocurrency market soaring to a worth of $410 billion as of mid-February 2018, it’s no wonder that many governments are looking into regulation of cryptocurrency and blockchain, the underlying technology.
Some governments have been quick and perhaps heavy-handed in their regulations. China, for example, banned ICOs and crypto-trading amongst its citizens, including using overseas services, but they have also expressed support for blockchain technology. Certain US states are just beginning to introduce bills regarding cryptocurrency such as allowing income tax payments using currencies like bitcoin.
The purpose of the UK investigation, according to the Treasury Committee, is to understand the risks and benefits of cryptocurrency both to financial infrastructure and other innovative use cases for blockchain.
Blockchain has expanded well outside the realm of finance, into industries such as healthcare and supply chain.
However, among the most popular uses for the technology is investment and trading, despite the fact that cryptocurrencies are presently unregulated in places such as the UK, and offer no consumer protections.
But the UK has not yet determined that blockchain should only be used outside of payments, and the chair of the committee, Nicky Morgan, is cited by BBC as saying,
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.
Could cryptocurrency take the place of conventional, fiat payments?
Another facet of the inquiry–and one that is cited as a major point for many crypto enthusiasts–is trust.
The British government is questioning “how regulation might be beneficial in terms of consumer trust.”
While we have seen nothing to point toward regulatory changes that would impact UK ICOs or exchanges, this inquiry could pose a turning point in the government’s stance on both cryptocurrency and blockchain–or at least the start of it.
Anyone involved in cryptocurrency or blockchain is encouraged to stay aware and mindful of regulatory changes in the UK and across the globe.