The United Kingdom is ready to release the hounds on the cryptocurrency market, with a task force set to investigate both the benefits and t...
The United Kingdom is ready to release the hounds on the cryptocurrency market, with a task force set to investigate both the benefits and the risks of digital currencies.
Taking Cryptocurrency to Task
Britain’s department of finance, the Treasury, unveiled its task force readied to weigh the pros and cons of cryptocurrencies.
The United Kingdom’s interest in investigating cryptocurrency stems from the desire to not fall behind their geopolitical and economic rivals. UK Finance Minister Philip Hammond stated:
I am committed to helping the sector grow and flourish, and our ambitious sector strategy sets out how we will ensure the U.K. remains at the cutting edge of the digital revolution.
However, the no-longer-interested-in-being-European country hasn’t been particularly pro-cryptocurrency, and that’s not likely to change. Rather, it’s likely more interested in co-opting blockchain technology for its own traditional financial institutions. Said Hammond:
As part of that, a new task force will help the U.K. to manage the risks around crypto assets, as well as harnessing the potential benefits of the underlying technology.
The task force includes the Bank of England and the Financial Conduct Authority — neither of which has shown support to Bitcoin and cryptocurrencies in the past. Earlier this month, Bank of England Governor Mark Carney — who has a long history of anti-cryptocurrency rhetoric — stated:
The short answer is: [cryptocurrencies are] failing. Cryptocurrencies are poor stores of value. Over the past 5 years, the daily standard deviation of Bitcoin was 10x that of sterling […] This extreme volatility reflects that the cryptocurrencies have neither intrinsic value nor external backing.
Whether the task force’s conclusions match Carney’s sentiment remains to be seen.
Building Bridges
Britain’s new cryptocurrency task force is but one part of the sovereign state’s financial technology strategy, which also includes penning a deal with Australia. The two countries’ “fintech bridge” will afford British firms the ability to sell their products and services in Australia, while both countries work together on crafting policies and regulation on digital currencies, blockchain technology, and fintech.
After signing the deal, Britain’s Innovate Finance and Australia’s Fintech Australia will advise the governments of both countries in matters relating to financial technology. Innovate Finance’s Charlotte Croswell claimed the “fintech bridge” is an “excellent opportunity” for both countries.
What do you think of the UK’s new cryptocurrency task force? Do you expect more FUD, or perhaps a little bit of FOMO? Let us know in the comments below!
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