The Treasury Committee of the UK House of Parliament has launched an inquiry into digital currencies and distributed ledger technology – also commonly referenced as Blockchain.This inquiry will examine the use of digital currencies and distributed ledger technology in the UK.
The inquiry will cover:
The role of digital currencies in the UK, including the opportunities and risks digital currencies may bring to consumers, businesses and the Government (and associated bodies).
The potential impact of distributed ledger technology on financial institutions, including the central bank, and financial infrastructure.
The regulatory response to digital currencies from the Government, the FCA and the Bank of England in relation to Anti-Money Laundering legislation 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:
- Are digital currencies ultimately capable of replacing traditional means of payment?
- To what extent could digital currencies disrupt the economy and the workings of the public sector?
- What risks and benefits could digital currencies generate for consumers, businesses and governments?
- How is distributed ledger technology being applied in the financial services sector, and how might it be applied in future?
- What work has the Government (and its associated bodies) done to understand, prepare for and, where relevant, encourage changes that may be brought about by increased adoption of digital currencies?
- How might the Government’s processes adapt should digital currencies be adopted more widely (e.g. tax implications, anti-money laundering measures)?
- Is the government striking the right balance between regulating digital currencies to provide adequate protection for consumers and businesses whilst not stifling innovation?
- Could regulation benefit digital currency start-ups by improving consumer trust?
- How are governments and regulators in other countries approaching digital currencies and what lessons can the UK learn from overseas?