UK Lawmakers to weigh on prospects and risks in Cryptocurrencies
Feb 22, 2018 Posted / 1388 Views
Across the world, the governments and regulatory bodies are looking to provide a status quo for the cryptocurrencies. While benefits of blockchain technology are visible but giving a standing to cryptocurrencies, which necessarily oust the middleman (that are banks and governments themselves) obviously seem dubious to them. Most importantly, these new age currencies pose threat to the supremacy of these central authorities.
Following the suit, the lawmakers in the United Kingdom addressed the media that they are also launching an inquiry to scrutinize the benefits of cryptocurrencies along with the risks posed by them on the overall financial structure. The currencies will mainly research to formulate regulations pertaining to cryptocurrencies.
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For the purpose, Parliament’s Treasury Committee will review the impact of Bitcoin and its peers on banks and consumers. Reuters reported that the committee will essentially weigh whether the digital currencies can sequentially replace traditional money. The statement issued by the lawmakers revealed that an 11-member committee will examine how to survey cryptocurrencies as the government as the market is already facing a severe threat from lack of transparency and these currencies hold little accountability.
Nicky Morgan, a Conservative lawmaker and the committee's Chairwoman told Reuters that awareness regarding cryptos have increased which is why they need regulations. “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.” She further added, “Striking the right balance between regulating digital currencies to provide adequate protection for consumers and businesses, while not stifling innovation, is crucial.”
Not only does the Bitcoin comes under surveillance but lawmakers say that the underpinning technology behind blockchain will also be examined. The lawmakers will evaluate how the financial institutions will be affected by the Blockchain technology including Bank of England.
The administrators around the world, including big banks and regulatory authorities, have struggled to understand the Bitcoin and crypto mania. Most critics have compared the currency to the dot-com bubble and Tulip mania of the 17th century. However, despite the constant criticism the industry has been able to grow steadily, with the price of bitcoin by one time peaking $20,000 USD. There are almost 1,515 cryptocurrencies in the market and according to the statistics provided by Coinmarketcap, in a 12 months period, there has been 2,000 percent increase in their market cap.
Lately, the trend to set up regulations for the virtual currencies have gained momentum amongst the nations and it can be stated that the UK is little late. China already banned the mining and cryptocurrency exchanges and has even prohibited the sale of new digital tokens. While on the other hand, Japanese exchanges who are already battling with hacks and security threats, had been asked by the government to first register and file their financial reports. In the U.S., the Securities and Exchange Commission (SEC) has been reverberating with warnings on initial coin offerings- ICOs for months now and these could come under stricter laws now.
Accordingly, the U.K. has been more watchful as in November, the Financial Conduct Authority cautioned consumers to be circumspect the “extremely high-risk, speculative products.” The UK Parliament will launch inquiry today, with the date of the first evidence session yet to be declared.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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