Today, March 22, 2018, at the government’s second International Fintech Conference, Exchequer Chancellor Philip Hammond announced the launch of a Fintech Sector Strategy that looks to keep the U.K. on the forefront of the industry.
The primary component of this new strategy will be the introduction of a Crypto Assets Task Force composed of representatives from the Bank of England (BOE), HM Treasury and the Financial Conduct Authority (FCA). The purpose of this team will be twofold: promote the U.K.’s position as a leader in the emerging world of digital currency, while concurrently establishing the infrastructure needed to monitor the “potential risks” associated with the crypto space.
This development follows a recent shift in the British government’s public attitude toward cryptocurrency. In January 2018, at the World Economic Forum, Prime Minister Theresa May voiced her apprehensions toward virtual currency and suggested that stronger regulations should be considered “very seriously” — a sentiment that was echoed earlier this month by BOE governor Mark Carney who, in an interview with CNBC, decried the “speculative mania” that surrounds crypto assets.
His rhetoric, and that of the British government, has since changed. On March 18, preceding the G20 summit, Carney released an official letter through the Financial Stability Board (FSB) that dramatically reasserted his position. It stated that at its current size “crypto assets do not pose risks to global financial stability” and that their underlying technologies “have the potential to improve the efficiency and inclusiveness of both the financial system and the economy.”
He did admit, however, that due to the rapidly evolving nature of the market, that this initial assessment could change — and change quickly. As digital currency becomes more integrated and interconnected with the economic system at large, emphasis should be placed on “support monitoring and timely identification of emerging financial stability risks.”
It would seem that the announcement of the Crypto Assets Task Force represents an attempt by the British government to follow up on this recommendation. By combining three of its most preeminent financial institutions, the U.K. hopes to create a watchdog with the resources necessary to monitor the immediate risks and long-term benefits of this developing technology. Whether this move will be adequate to alleviate anxieties that have arisen in response to the recent volatility of the crypto marketplace is yet to be seen.
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