Lawmakers in the UK are set to investigate the risks and benefits brought on by cryptocurrencies. Their intent is to determine how digital currencies can be regulated. The Treasury Committee of the Parliament will be assessing Bitcoin’s and other digital currencies’ impact on consumers and banks. The committee is also looking into replacing conventional money with cryptocurrency. The committee’s eleven members will determine the proper way to police cryptocurrencies as the U.K. government is trying to get a hold of the absence of accountability and minimal transparency currently evident in the digital currency market.
According to Conservative lawmaker and chairwoman of the Treasury Committee, Nicky Morgan, though cryptocurrencies are becoming popular, very few people know that it is currently not regulated. She stated, “People are becoming increasingly aware of cryptocurrencies such as Bitcoin, but they may not be aware that they are currently unregulated in the U.K.” Morgan added, “Striking the right balance between regulating digital currencies to provide adequate protection for consumers and businesses, while not stifling innovation, is crucial.” Included in the committee’s investigation is how blockchain technology affects major financial institutions such as the Bank of England.
The parliament’s investigation is prompted by its need to understand a craze that is currently sweeping the global market. Based on CoinmarketCap.com’s research, the entire value of more than a thousand cryptocurrencies in the digital world market increased to 2,000 percent in the past year. While countries such as Japan and China have taken a stance on cryptocurrencies, U.K. has yet to determine its position with regards to digital currencies. In Japan, cryptocurrency exchanges are required to register with the government. Meanwhile, China has issued a ban on new digital currency sales. The Securities and Exchange Commission in the US is giving signs that regulations might be implemented. But in the U.K., its Financial Conduct Authority has merely issued a warning to consumers citing cryptocurrencies as products that are “extremely high-risk, (and) speculative.”