UK Government Questions Implications Of Bear Market Crypto Price Drops On The Economy

A Finance Feeds post noted that the U.K Government has failed to address the effects of cryptocurrency’s downward trending markets, especially in relation to the usefulness of blockchain technology and the overall economy.

It turns out, Lord Taylor of Warwick was the first to inquire Her Majesty’s Government by addressing the need for an assessment following the “value of cryptocurrencies in the United States [continuing to fall]” and whether it has the potential to negatively influence the “UK blockchain industry.”

Department for International Development’s Minister of State, Lord Bates was the one to answer the question, to which he replied that the “government has not made a formal assessment of any potential implications of recent changes in the value of cryptocurrencies.” However, it was assured that the necessary research and development along with essential monitoring is underway.

It is important to keep in mind that the Cryptoassets Taskforce was only established in March 2018, where the said group was given the responsibility to assess the risks and rewards of cryptocurrencies and the usefulness of distributed ledger technology (DLT) within the financial sector. The Taskforce is a combined contribution, which includes the HM Treasury, Bank of England and the Financial Conduct Authority.

To confirm the lack of assessment, Economic Secretary at HM Treasury, John Glen, revealed that the Chancellor did not have any discussions with the Bank of England about a possible, state-backed token. The bank does not seem to focus on a state-backed token, but rather seems more engaged in the research and understanding the risks before getting involved.

According to Finance Feeds, Glen was previously questioned in such matters, to which he confirmed that the government does not “have plans to recognize digital currencies as legal tender” or as “financial instruments”. For the time being no particular regulation regarding cryptocurrencies have been established in the state, besides those related to CFDs.