The Treasury committee that comprises of the members of parliament in the UK has launched an inquiry into the bitcoin and other virtual currencies over the growing fears that the digital currencies are fueling the cybercrime and money laundering activities. The committee would also inspect the potential impact of the blockchain technology and other systems on the banks and other financial institutions.
According to Nicky Morgan, chairperson at the Treasury committee, the investigation is intended to scan for the risks that consumers face when they invest in the cryptocurrencies such as the bitcoins, especially given the fact that the prices fluctuate wildly.
Morgan added that people across the world are increasingly becoming aware of the trends of cryptocurrencies but they may not understand that the market is currently unregulated in the UK and that they are not protected by any law. Therefore the Treasury committee will closely examine the risks that the consumers, enterprises, and governments are exposed to when they directly get involved in the virtual currency business.
Mark Carney, the Governor at the Bank of England commented recently that bitcoin has failed as a currency since no one is using it as a medium of exchange. According to the latest news from Reuters, the Treasury committee is focusing on four key issues, whether the:
- Virtual currencies are capable of replacing the traditional currency;
- Virtual currencies disrupt the economy and the public sector activities;
- Virtual currencies pose risks or benefits to the consumers, enterprises, and governments;
- Virtual currency start-ups can be regulated to improve consumer trust;
According to Steven Mnuchin, the US Treasury Secretary, the focus on the virtual currencies should be to ensure that they are not used to enhance the illicit activities in the world. Other global leaders including France’s and Germany’s ministers have also urged the fellow G20 leaders to consider regulating the cryptocurrencies by putting it on the agenda for this year’s G20 summit that would be held in Argentina in November.