UK Chancellor of the Exchequer Philip Hammond announced a new cryptoassets task force, reportedly to make it faster and easier for financial tech firms to follow complex regulations and a new UK-Australia ‘fintech bridge’ to help UK firms expand internationally.
Chancellor Hammond spoke at the U.K. government’s second International Fintech Conference on March 22. Hammond revealed that the new task force would include representatives from the Treasury, the Bank of England, and the Financial Conduct Authority, Britain’s financial watchdog.
Chancellor Hammond stated:
I am committed to helping the sector grow and flourish, and our ambitious Sector Strategy sets out how we will ensure the UK remains at the cutting edge of the digital revolution. As part of that, a new task force will help UK to manage the risks around Cryptoassets, as well as harnessing the potential benefits of the underlying technology.
The conference joined international investors, UK financial technology industry (fintech) firms and “leading industry figures, regulators and policymakers.”
The Fintech Sector Strategy will include:
— A Cryptoassets Task Force consisting of HM Treasury, the Bank of England, and the Financial Conduct Authority. This will help the UK to be at the forefront of harnessing the potential benefits of the underlying technology, while guarding against potential risks.
— ‘Robo-regulation’ pilot schemes to help new fintech firms, and the financial services industry more widely, comply with regulations by building software which would automatically ensure they follow the rules, saving them time and money.
— Appointing three new Fintech Regional Envoys to ensure the benefits of fintech are felt across the UK.
— Creating a set of industry standards which will enable fintech firms to more easily partner with existing banks.
— Helping new, small fintech firms to provide complex financial services and thereby grow their businesses and reach new customers. Industry and government will work together to create ‘shared platforms’ which will help remove the barriers that these firms face in setting up new systems.
— A Connect with Work programme developed by the government’s Fintech Delivery Panel to help fintech firms to take advantage of the UK’s diverse workforce.
This task force announcements is not surprising; in February the UK Parliament announced the Treasury Committee would be launching a new inquiry into digital currencies and distributed ledger technology.
Chair of the Treasury Committee, Nicky Morgan, said that “the Treasury Committee will look at the potential risks that digital currencies could generate for consumers, businesses, and Governments, including those relating to volatility, money laundering, and cyber-rime.”
The UK government is reportedly looking to work alongside tech leaders to allow for innovation while protecting the consumer. Charlotte Crosswell, CEO of Innovate Finance said that “this exciting partnership between Innovate Finance and FinTech Australia will foster even stronger ties between the fintech communities of our two countries and is an important step in supporting innovation in financial services on an international scale,” and noted that it “offers an excellent opportunity to work together to share industry best practices, strengthen understanding and knowledge of each other’s fintech markets, and drive progressive regulatory approaches to help our fintech sector grow.”
Calls for regulation in the cryptocurrency market has been increasing recently, including G20 economic leaders discussing regulation deadlines. The U.S. Securities and Exchange Commission (SEC) has also been clear about plans to crack down on cryptocurrency exchanges in the US.
Cryptocurrency businesses across the world have been encouraging regulators to work alongside industry leaders. The UK appears to be attempting to do this, and the US may follow suit.