UK government to announce launch of task force to scrutinize cryptocurrency risks and benefits

The cryptocurrency task force will also sign an agreement with Australia that enables U.K. fintech firms to sell products and services in Australia

David Nurieli
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U.K. Chancellor Philip Hammond will today announce at the Treasury's second annual International Fintech Conference a new task force, which includes Britain's central bank, the Bank of England, and the Financial Conduct Authority looking at cryptocurrencies.

The task force is part of a wider fintech, or financial technology, strategy laid out by Westminster. As part of its initiative, the U.K. will sign the "fintech bridge" agreement with Australia that will enable British fintech firms to sell products and services in Australia. The deal will also look to build cooperation on policies and regulation surrounding the sector.

"As part of that, a new task force will help the UK to manage the risks around cryptoassets, as well as harnessing the potential benefits of the underlying technology," Hammond said in a statement ahead of a fintech conference hosted by the finance ministry.

"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.”

Both Britain and Australia's fintech industry bodies — Innovate Finance and Fintech Australia — will engage in regular summits aimed at advising the governments of both countries, the Treasury said.

Charlotte Croswell, the chief executive of Innovate Finance, said the so-called fintech bridge offered an "excellent opportunity" for the two countries to share industry knowledge.

The statement said that the latter would consist of "pilot schemes to help new fintech firms, and the financial services industry more widely, comply with regulations by building software which would automatically ensure they follow the rules, saving them time and money."

The U.K.'s announcement comes after finance ministers from the Group of 20 Economies (G20) were unable this week to find enough consensus for global regulation of cryptocurrencies.

The government's strategy also aims to create financial industry-wide standards that make it easier for fintech firms to partner with banks, it said. Hammond is set to speak about the strategy at a conference organized by the Treasury in London on Thursday.

The U.K. fintech sector contributes £6.6 billion annually to the U.K. economy and employs over 60,000 people across 1,600 companies, according to the Treasury, and the Treasury wants to reassure the sector of its support ahead of the country's departure from the European Union next March.

It is evident Bitcoin and altcoins pose a threat to institutional financial services. Various banks around the world have echoed such sentiments throughout 2018. The U.K. Finance Minister wants to ensure the nation remains at the cutting edge of the digital revolution. Cryptocurrencies can no longer be ignored as we speak and it is a positive turn of events for the industry as a whole.

Bank of England Governor Mark Carney called for more regulation on the sector this month, and labeled price volatility within the space "speculative mania." The central bank's chief said last month that bitcoin has "pretty much failed" as a form of money.

In addition, Financial Conduct Authority Chief Executive Andrew Bailey has previously warned buyers of bitcoin to "be prepared to lose all your money."

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