To ask Her Majesty's Government what plans they have to examine (1) the regulatory framework for digital currencies, and (2) the policies of the UK banking sector towards the providers of digital currencies and their employees.
Answered on
21 November 2017
The Government keeps all policy under review. The Government is currently negotiating amendments to the 4th Anti-Money Laundering Directive that we expect to bring virtual currency exchange platforms and custodian wallet providers into the scope of Anti-Money Laundering and Counter-Terrorist Financing regulation. This will require such firms to conduct due diligence upon their customers, with their activities being overseen by national competent authorities for these areas. The government supports the intention behind these amendments. We expect these negotiations to conclude at EU level in late 2017/early 2018. The stance of individual firms towards providers of digital currencies is a commercial decision for those firms, and it would not be appropriate for the Government to intervene.
Last month, the Financial Conduct Authority issued a consumer warning about the risks of Initial Coin Offerings (ICOs). It advised consumers to be conscious of the risks involved (including the possible lack of regulation and investor protection, price volatility and potential for fraud) and to fully research the project before investing. The Financial Conduct Authority (FCA) also noted that whether an ICO falls within the FCA’s regulatory boundaries or not can only be decided case by case.