British lawmakers launch inquiry into cryptocurrencies

British lawmakers launch inquiry into cryptocurrencies
UK’s Treasury Committee says it wants to study digital currencies and the blockchain technology behind them to understand the risks and benefits of cryptos and their rising popularity.

“People are becoming increasingly aware of cryptocurrencies such as bitcoin, but they may not be aware that they are currently unregulated in the UK, and that there is no protection for individual investors,” said committee Chair Nicky Morgan.

According to the committee’s statement, it will consider whether the government is striking the right balance between protecting customers and businesses without stifling innovation.

“We will also examine the potential benefits of cryptocurrencies and the technology underpinning them, how they can create innovative opportunities, and to what extent they could disrupt the economy and replace traditional means of payment.”

Governments and regulators across the world have lately been calling for a crackdown on cryptocurrencies. Governor of the Bank of England Mark Carney said on Monday that bitcoin has “pretty much failed” as a currency measured by standard benchmarks, and is neither a store of value nor a useful way to buy things.

The French and German finance ministers said digital coins “could pose substantial risks for investors” and potentially long-term financial stability.

Warnings have also been voiced by regulators and watchdogs from the Bank for International Settlements (BIS), the European Central Bank (ECB), and Hong Kong’s Securities and Futures Commission.

According to the head of BIS Agustin Carstens, bitcoin is “a combination of a bubble, a Ponzi scheme and an environmental disaster.” He called on central banks to clamp down on virtual currencies to stop them “piggybacking” on mainstream institutions and becoming a “threat to financial stability.”

The world’s most popular cryptocurrency, bitcoin, lost over half its value earlier this year after surging more than 1,300 percent. It was trading at $10,670 on Thursday, down by more than 5 percent.

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