An explosion of interest and the massive investment in cryptocurrencies has been questioned by the UK’s Treasury Select Committee. The members of parliament have initiated an inquiry into the use of the digital currencies, which they claim have a share of risks and benefits. The inquiry will also be seeking to establish the impact the currencies have on consumers and businesses.
Cryptocurrencies such as bitcoin are becoming increasingly common the market. However, a majority of people are not that they are not regulated in the UK. As a result, the MPs outline the need for protecting Britain’s financial infrastructure without necessarily having to strangle innovation. They will be seeking a balance between protection and regulation.
The Chair of the of the committee, Nicky Morgan explained, “We will also examine the potential benefits of cryptocurrencies and the technology underpinning them, ……….. and to what extent they could disrupt the economy and replace traditional means of payment.”
The rise and the fall of the cryptocurrencies
While a section of people could be celebrating their investment on the cryptocurrencies, others are crying foul. Apparently, there has been a rapid rise followed by subsequent fall. The presence of bitcoin in the market last year was referred to as a “Ponzi” investment scam full of criminals and tax evaders.
The Bank of England’s governor Mark Carney further explains that the digital money is not a store of value. It has failed the traditional aspects of money.
The launch of an inquiry signals a step forward to the regulation of digital currencies
There has been an inconsistent interest in supporting innovation vs. consumer protection. Apparently, no country has been able to solve the crypto –puzzle and all eyes are now on the inquiry. The question is, will the UK government give an answer to the regulation of bitcoin?
Word has it that the Committee is likely to use South Korea’s approach if at all they will arrive at an agreement on regulation. Different lawmakers and government officials have been discussing the relationship between EU and cryptocurrency but they are yet to come up something tangible.