On Monday, junior finance minister of Britain, John Glen announced that the UK government and regulators will introduce new research aimed to flesh out the potential risks from cryptocurrencies like Bitcoin.
The national regulators have warned investors and traders on the danger surrounding of a crypto market. Cryptocurrencies have been unregulated, illiquid, and prone to wide swings in cryptocurrency value that strictly limit its use as a currency for transactions.
Preston Byrne, a structured finance solicitor and founder of Monax, a blockchain software company said that
“Bitcoins are concentrated in very few hands, who owns a bitcoin is not clearly defined, market manipulation is rife, and whether a transaction settles or not is probabilistic, rather than legally certain and final.”
UK Government Moves Towards the Cryptocurrency Risk
At the Innovate Finance Conference London, Glen said that
“In our upcoming fintech strategy, the government will announce further work with the Financial Conduct Authority and the Bank of England to consider these issues in more detail. … The UK is the best place in the world for fintech and my mandate is to ensure it remains such.”
Glen said that there is an “explosion of growth” in crypto assets like Bitcoin. However that might produce risks even if the essential technology has massive potential. Furthermore, he also said that he wishes to defense London’s position as a foremost worldwide center for FinTech research and blockchain technologies.
The year 2017 was the record-breaking year for the financial sectors of UK. In this regard, it has estimated that worth £1.3 billion assembled from global investors. The half of the capital is funded from abroad. However, this was the indication for the British regulators for endorsing blockchain projects.
The UK Treasury Select committee has already introduced an examination into cryptocurrency. Thus its head said regulation needed to keep up with the pace of alteration. However different countries contest severely to entice FinTech organizations.
Hence, the government of UK remains quite for a long time about cryptocurrencies. Mark Carney, Governor of the Bank of England said that cryptocurrencies are safe for the international monetary stability, as of today.
Further, he said
“The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time.”