UK targets cryptocurrencies

Lawmakers probe digital currencies and opportunities, risks posed

Britain’s cross-party Treasury Select Committee of lawmakers yesterday said it is launching an inquiry into digital currencies, as well as the underlying distributed ledger technology.

The probe will focus on the opportunities and risks posed to consumers, businesses and the government by the rising popularity of so-called cryptocurrencies, the committee said in a statement.

A global investment craze over Bitcoin and other cryptocurrencies in the last year has seen wild gyrations in their valuations, making fortunes for some investors, while others have lost heavily. Bitcoin, the best known virtual currency, lost over half its value earlier this year after surging more than 1,300 per cent. The cryptocurrency traded 4.88 per cent lower at $9,946.33 (Dh36,531) yesterday. It has gained from a low of near $6,900 levels seen on February 5.

“People are becoming increasingly aware of cryptocurrencies such as Bitcoin, but they may not be aware that they are currently unregulated in the UK, and that there is no protection for individual investors,” Nicky Morgan, chair of the Treasury Committee, said.

The British committee of politicians will take written and verbal evidence from a range of experts on the digital currencies, which will then inform a report it submits to the government containing recommendations on what to do.

The inquiry will consider whether the government is striking the right balance between protecting customers and businesses without stifling innovation.

Governments and regulators worldwide have in recent months shown themselves divided on what to do about cryptocurrencies, which have already spawned investment scams promising returns of over 1,000 per cent and hacks on the exchanges that store the virtual funds.