The government should be careful not to crush emerging cryptocurrencies with excessive regulation and should focus on the benefits that these digital alternatives bring to customers, according to a new report by the BBA.
The BBA, which is the leading group representing the UK’s biggest banks, issued the comments in response to the government’s ‘Call for Information’ on digital currencies that was issued in November last year to provide the government with the necessary information to fully understand digital currencies.
The document consisted of 13 questions, ranging from the potential benefits of digital currencies, through to government involvement and new services facilitated by blockchain technology.
The request remained open for a month to allow individuals, businesses and other organisations to submit their comments on various issues.
The UK Digital Currency Agency Association and several other companies published their opinions of the request. Its 46-page response outlined the need for digital currencies to be considered ‘financial measure’ and thus regulated in the same way as the foreign exchange and gold. the UKDCA recommended that regulatory oversight is kept to a minimum, arguing that over-regulation could potentially stifle innovation.
The response, a joint collaboration with the Payments Council, began by welcoming the UK government’s request before going on to consider both the benefits and risks associated with digital currencies.
In particular, it pointed out that while digital currencies carry many of the same perks as the UK’s Faster Payments initiative, they carry the added benefit of keeping down costs on cross-border payments.
UK Chancellor of the Exchequer George Osborne reflected this interest in his recent Innovate Finance speech, saying: “These alternative payment systems are popular as they are quick, cheap and convenient […] I want to see if we can make more use of them for the benefit of the UK economy.”
The report concluded that, should the risks associated with crytocurrencies (such as volatility and potential crime) be sufficiently addressed, bitcoin and its counterparts could become a major feature in the UK’s payments and finance landscape.
Despite the data protection regulation being implemented in 2018, 69% of IT decision makers don’t have the backing of their board to achieve GDPR compliance, according to Calligo.
The majority of the region’s 28 member states report that the situation has worsened over the past year, reports business management consultant Verisk Maplecroft.
Regulators in the UK, the US and Hong Kong instituted proceedings against more than 1,700 individuals last year, or four times the number of cases brought against companies.
The US Commodity Futures Trading Commission approved LedgerX as the first regulated clearing house for derivatives contracts settling in digital currencies.