Crypto usage is developing quickly, and the UK doesn’t want to fall behind global regulatory trends. The UK Treasury’s recent crypto asset sector inquiry shows this. The government agency wants public input on crypto asset use cases, dangers, and potential.
The Committee’s deadline for submissions is Monday, September 12. The Treasury wants to know how crypto assets affect social inclusion and whether a regulatory change is needed.
In addition to determining the risks and opportunities crypto brings to consumers, businesses, and the government, the Inquiry seeks to cover the importance of distributed ledger technology (DLT) to the country’s financial infrastructure and get the public’s views on how regulatory measures can be balanced to protect users while creating a favorable environment that encourages innovation.
The Treasury notes that submissions are needed on emerging issues such as the potential role of a UK CBDC, the approach to taxation in the crypto space if the industry is widely accepted in the country, the lessons the UK government can pick up from the measures other countries have taken to regulate crypto, and the public’s opinion on the efforts the UK government has put so far into promoting innovation in the crypto space.
This recent Inquiry is part of the UK Government’s efforts to study blockchain and cryptocurrencies. BoE has shown interest in implementing a Central Bank Digital Currency (CBDC) in the country’s financial system.
In April 2021, the Bank of England and HM Treasury launched a Task Force to study how CBDCs may enhance the country’s financial system.
Despite its interest in a CBDC, the BoE isn’t sure how to regulate the crypto business. In its Financial Stability Report of July 2022, the BoE highlighted that digital assets do not presently threaten financial stability, but this might change if there is no regulatory framework to curb their usage.