The leaders of the recent G20 summit said they wanted more information before regulating cryptocurrencies. In the wake of this uncertainty about what path to take, Philip Hammond, the UK Finance Minister, announced the creation of a crypto asset task force.
The UK’s crypto asset task force consists of Britain’s central bank, the Bank of England, and FCA (Financial Control Authority). The governments around the world are exerting pressure to try & regulate crypto assets. Britain seems to want to bring together its most potent financial institutions, in order to monitor the emerging crypto industry. The objective is to help fight the short-term risks while reaping the long-term benefits of this new yet evolving technology.
The news points to the larger initiative taken by the British government to attract fintech companies. The decision comes at a time when many in the UK remain concerned about Brexit (Britain’s exit from the European Union) and its impact on the country’s businesses and economy. One of those worries is to no longer be able to freely conduct trade with EU’s single market.
Why Create Crypto Asset Task Force?
The exit of Britain from the European Union sparks the fears of the country indulging in unnecessary trade wars. This step of creating a crypto asset task force would enable Britain to improve ties with Australia. Furthermore, the British government has also signed an agreement with Australia, under which British fintech firms can sell their products & services in Australia.
The deal named “Fintech Bridge” aims to expand the collaboration between the two countries on crypto policies and regulations. The initiative also involves organizing regular summits between the UK and Australia involving the two countries’ fintech bodies.
Crypto Asset Task Force to Target Illicit Activities
There are two potential reasons for the creation of the crypto asset task force. The first is to let the UK become the leading force in the world of digital currencies. Second, to provide the infrastructure required for regulating the crypto space to monitor the associated risks.
The new task force also points to the British government’s increasing interest in cryptocurrencies. The British government already voiced her concerns about virtual currencies & the need to have stronger regulations.
One of the core concerns is the use of cryptocurrencies for illegal activities like terrorism financing and money laundering. Law enforcement authorities in different parts of the world are working to fight the use of cryptocurrencies for illegal purposes.
The US National Security Agency is reportedly monitoring Bitcoin’s blockchain for tracking senders & receivers of bitcoin. It wants to take down organized crimes & stop the use of e-currency services for money laundering purposes.
Mark Carney, the Governor of Bank of England, has already asked for better measures to be taken in regulating the crypto markets.