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UK Crypto Assets Taskforce to be Formed

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Chancellor of the Exchequer Philip Hammond is set to announce the formation of a crypto assets taskforce on Thursday.

A statement from the Treasury indicates that the taskforce will include in addition to the Treasury, the Bank of England and the Financial Conduct.

The taskforce will assess the risks and benefits of cryptocurrencies.

Philip Hammond

In the statement, Philip Hammond said the initiative “will help the U.K. to manage the risks around Cryptoassets, as well as harnessing the potential benefits of the underlying technology,” CNBC reports.

The development follows a meeting of finance ministers and central bank governors at the G20 summit which called on member countries to form taskforces on regulating cryptocurrencies. They are expected to report back with proposals by July.

The initiative will be part of a larger Fintech Sector Strategy by the UK government. The announcement is set to be made at the second International Fintech Conference organised by the Treasury.

An agreement between the UK and Australia that will connect the two markets with fintech products and services will be signed. It is also meant to foster cooperation around policies and regulations in the sector.

Australia stays in the forefront when it comes to cryptocurrencies and blockchain technology. The country’s stock exchanges are already implementing the technology and people can purchase the digital assets in newsstands.

Brisbane is even planning to launch a crypto-friendly airport terminal. Under the plan, travellers will make purchases using cryptocurrencies.

Respective fintech bodies will now be expected to meet regularly to engage regularly and advise the government accordingly.

“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,” Hammond said.

The Buenos Aires meeting generally struck a positive note on the sector but concerns were raised about the use of cryptocurrencies for money laundering and financing terrorism.

Prime Minister Theresa May has also voiced similar concerns

In a letter, FSB Chairman and Bank of England Governor Mark Carney noted that cryptocurrencies did not pose any threat to financial stability. With a market capitalisation of $331 billion, cryptocurrencies account for just about 1% of the global GDP, the letter said.

The governor had earlier characterised bitcoin as a “speculative mania” and said it had failed in its quest to become a form of money.

In the strategy, the government is rolling out a number of measures 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,” the Chancellor said in the statement.

The fintech sector contributes about £6.6 billion to the UK economy according to the Treasury.

The strategy is also intended to make it easier for fintech firms to partner with banks. This has particularly been a major bottleneck with cryptocurrency transactions. Several banks have banned their customers from using the credit cards to purchase cryptocurrencies.

Crypto to fiat transactions through banks are still limited. However, Coinbase recently opened an account with Barclays expected to make such transactions easier and faster.

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