Lord Bates explains that the UK government has not made any formal assessment of the implications of recent changes in cryptocurrency prices.
The UK government continues to face questions regarding cryptocurrencies and the effects they could have on certain sectors of the economy.
The last such question was asked by Lord Taylor of Warwick, asking “His Majesty’s Government what assessment he made of the information that the value of cryptocurrencies in the United States is declining and the potential effects that it has made. such a drop could have on the UK blockchain industry ”.
The response from Lord Bates, Minister of State at the Department for International Development, indicates that little has been done in this regard. Lord Bates said:
“The government has not made any formal assessment of the potential implications of recent changes in the value of cryptocurrencies. However, the government continues to monitor developments in the cryptocurrency market.”
Lord Bates recalls that the Chancellor of the Exchequer launched in March the Cryptoassets Taskforce, made up of HM Treasury, the Bank of England and the Financial Conduct Authority. The working group is examining the potential risks and benefits of cryptoassets and other applications of distributed ledger technology in financial services, as well as assessing what regulation, if any, is required in response. The task force is due to publish a report in the fall.
Less than a week ago, John Glen, Economic Secretary, HM Treasury, explained that the Chancellor had not had any formal discussions with the Bank of England over a state-backed digital currency.
He noted that while the Bank of England was not considering creating a central bank-issued digital currency, it had conducted research to understand the potential implications.
The remarks were made after John Glen had to respond to similar requests in March of this year. At the time, he said the government “is not currently considering recognizing digital currencies as legal tender or proposing to designate them as financial instruments.”
On February 22, 2018, the UK Treasury Committee opened a new investigation into digital currencies and distributed ledger (DLT) technology. The survey aims to explore the role of digital currencies in the UK, including the opportunities and risks that digital currencies can generate for consumers, businesses and government. It will also examine the potential impact of DLT – like blockchain – on financial institutions, including the central bank, and financial infrastructure.
There is no regulation of digital currencies in the UK apart from the regulation of certain related products like cryptocurrency based CFDs.