The UK Forms a Task Force to Examine Cryptocurrency Risks and Advantages

On Thursday, the U.K. finance minister Philip Hammond commissioned a task force that will monitor the perils and benefits of cryptocurrencies. The minister stated that the task force incorporates the Financial Conduct Authority (FCA) watchdog, the Bank of England (BOE) and the central bank of Britain. He added that FCA and BOE would initiate the process of automating financial compliance in Britain. The task force on cryptocurrency is part of the broader financial technology (fintech) strategy initiated by Westminster.

The UK entered into an agreement christened fintech bridge with Australia that will allow fintech firms in Britain to sell products and services in Australia as part of the drive. The minister said that the arrangement would also seek to increase cooperation on strategies and statutes concerning the sector. Hammond said that the task force would help the UK to be at the fore in harnessing the likely benefits of the underlying technology while safeguarding against possible risks. He added that the task force would help cement the UK as a leading fintech hub, as it would help the sector evolve and flourish.

Hammond stressed that he aimed to make the U.K. the most attractive place for global fintech companies. Speaking in London at a fintech gathering organized by the UK treasury, Hammond said that he intended to facilitate the increased formation of technology business start-ups in the UK and added that the government would support inventors and innovators. Some businesses have been concerned that Brexit will have tremendous negative effect; in particular, a possible exit from the single market — will undermine their capability to trade freely across the bloc.

The treasury said that both fintech industry organizations in Australia and Britain (Fintech Australia and Innovate Finance) would have frequent meetings intended at advising the governments of both countries.

Charlotte Croswell, who is the chief executive of Innovate Finance, said that the fintech bridge provided an extraordinary chance for the two countries to share industry knowledge. Australian Treasurer Scott Morrison signed the agreement on behalf of his government.

As noted in an article posted on CNBC, the U.K. government’s strategy also intends to build financial industry-wide measures that will make it simpler for fintech companies to partner with banks. Cryptocurrencies are a controversial issue for governments due to their decentralized nature and unstable prices. Last year, the world’s most popular cryptocurrency, bitcoin, rose to a record high close to $20,000.

Last month, the Bank of England Governor Mark Carney, labelled the price instability in cryptocurrency arena as speculative mania, and asked for more regulation on the sector saying that bitcoin had failed miserably as a form of money. Besides, Financial Conduct Authority Chief Executive Andrew Bailey has previously cautioned bitcoin buyers to be prepared to lose all their money.