Philip Hammond announced that Britain will create a crypto assets task force to help fintech companies navigate complex financial regulations. The Chancellor made the declaration during a speech at Lo
Philip Hammond announced that Britain will create a crypto assets task force to help fintech companies navigate complex financial regulations. The Chancellor made the declaration during a speech at London's International Fintech Conference, his second appearance at the annual event. The task force will bring together the Bank of England, the Treasury, and the Financial Conduct Authority, three of the country's most powerful financial institutions. In his speech, Hammond explained the reasoning: "A new task force will help the U.K. to manage the risks around crypto assets, as well as harnessing the potential benefits of the underlying technology."
In February, the Treasury launched a formal review of cryptocurrency risks, including money laundering, cybercrime, and price volatility. Nicky Morgan, a Member of Parliament and Treasury Committee chair, said the process would also "examine the potential benefits of cryptocurrencies and the technology underpinning them."
Iqbal Gandham manages eToro's U.K. operations at one of Europe's largest cryptocurrency retailers. He told MiningPool the task force represented a milestone for consumer protection and market stability. "This is a truly exciting market, with a huge amount of potential, which unfortunately a small number of rogue providers have taken advantage of," Gandham said. "But the industry as a whole shouldn't be tarred with the same brush."
David Siegel, founder and CEO of the Pillar Project, a nonprofit based in Zug, welcomed the move but called for regulators to build fresh frameworks rather than rely on existing rules. "I am very excited that regulators are listening. They should be focused on exposure, not risk. I have tried to show that it's practically impossible to regulate financial products even without crypto-assets. Now, assuming we will over the next 20 years tokenize and trade all asset classes, it's time to rethink legislation and regulation from the bottom up, not try to patch the existing framework."
Pressure for regulation has mounted from multiple directions. Earlier this week, G20 economic leaders set July as the deadline for delivering cryptocurrency regulation recommendations. In the United States, the Securities and Exchange Commission has pursued a more aggressive tack, targeting digital currency exchanges. Most cryptocurrency companies support regulation but want regulators to work closely with the industry as rules take shape.
David Moskowitz, Indorse co-founder and director, stressed the value of collaboration between government and the sector. "It's extremely important for the industry to work together with the regulators to both help the regulator understand the technology and assist in creating the proper regulatory frameworks which reduce potential risks to the economy and consumers, while not inhibiting innovation. In Singapore, the non-profit association ACCESS talks frequently with our regulator MAS and has provided important feedback on consultation papers put out to the industry. This allows us to give feedback to the regulator on how the proposed frameworks may impact the industry and how what we believe would be a more appropriate regulatory structure."
Hammond also outlined additional measures beyond the task force. The government plans to pilot so-called "robo-regulation" schemes, software designed to help new fintech firms and financial services companies comply with rules by automating compliance and reducing both time and expense for firms.
Speaking at the World Economic Forum in January, Theresa May, the U.K.'s Prime Minister, voiced concerns about criminal misuse of bitcoin and said the government should consider bitcoin monitoring "very seriously."
