The crypto task force will consist of Bank of England, Her Majesty’s Treasury Office, and the Financial Conduct Authority. The move comes as U.K. fintech and blockchain companies are moving their businesses to other parts of Europe to serve the European market in light of Brexit.
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U.K. to Capitalize on Blockchain
The task force is being created to safeguard U.K. citizens from the risks surrounding digital currencies, while at the same time capitalizing on cryptocurrencies’ underpinning technology — the blockchain.
In a statement, U.K. Finance Minister Phillip Hammond noted:
“I am committed to helping the sector grow and flourish, and our ambitious sector strategy sets out how we will ensure the U.K. remains at the cutting edge of the digital revolution. As part of that, 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.”
Days ago, Bank of England Governor Mark Carney wrote in a letter that crypto-assets do not pose any risk to the global financial stability. However, a few weeks before, Carney hinted at a regulatory clampdown on cryptocurrencies, due to its rising popularity for illicit uses.
At the time, he said:
“Authorities are rightly concerned that given their inefficiency and anonymity, one of the main reasons for their use is to shield illicit activities. This cannot be condoned. Anarchy may reign on the dark web, but in the U.K. it’s just a song that your parents used to listen to.”
An apparent change of heart, to say the least.
Brexit Has Affected Domestic Fintech Plays
In light of Brexit, several U.K.-based fintech firms are migrating to Europe in order to serve the bigger European market.
To that end, the Northeastern European country Lithuania is routinely approaching the U.K.’s blockchain and fintech companies with tempting offers to move to the Baltic nation. In the past, notable U.K. companies like Revolut — a digital banking alternative — hinted at launching a financial institution in Lithuania.
Now, it looks like the U.K. is trying to stop that entrepreneurial tide from leaving with its new crypto task force. It’s a reasonable step forward as the nation tries to receate a feasible ecosystem for fintech and blockchain startups.
Will the U.K. continue softening its stance on cryptocurrencies to retain crypto startup companies? Let us know your views in the comments section below.
Images via The Telegraph, The Times