The Treasury Committee of the U.K. Parliament plans to launch an investigation into cryptocurrencies, namely, to examine how virtual currencies like bitcoin affect British investors and businesses.
Even as cryptocurrencies have grown in popularity (and value), their future has remained unclear. Some countries have adapted by fiercely cracking down on cryptocurrency exchanges, ICOs, and other elements of the new industry. (See also: China To Crack Down On International Cryptocurrency Trading By Its Citizens.)
Other governments are more cautious in their approach. Still, for a global industry that is known for its extreme volatility, even the slightest inkling that a country may be looking to step in with additional regulation can send markets tumbling.
The inquiry, which was announced on February 22, will explore the ways in which cryptocurrencies impact U.K. consumers, investors and businesses, according to a report by Coin Telegraph. The Treasury Committee cited the media hype surrounding virtual currencies and their erratic price movements for the probe.
Crypto Markets Still Unregulated In UK
According to Treasury Committee chair Nicky Morgan, the inquiry "will look at the potential risks that digital currencies could generate for consumers, businesses, and governments, including those relating to volatility, money laundering, and cyber-crime. We will also examine the potential benefits of cryptocurrencies and the technology underpinning them, how they can create innovative opportunities, and to what extent they could disrupt the economy and replace traditional means of payment."
At this point, cryptocurrencies are largely unregulated in the U.K. This inquiry is broad in its mandate, but it will reportedly include hearings regarding how regulation might be beneficial in terms of consumer trust. Beyond that, the investigation aims to explore how cryptocurrency could continue to develop into the future, and particularly if it could ever sufficiently replace traditional payment systems. (See also: Could Cryptocurrencies Replace Cash?)
For the time being, there have been no suggestions that the British government is interested in adding regulatory measures to control the cryptocurrency exchanges or ICO launches taking place in the U.K. Nonetheless, in an industry that changes dramatically and quickly, investors will no doubt want to watch to see how the inquiry unfolds in the months to come.
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