Treasury written question – answered on 9th January 2023.

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Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

To ask the Chancellor of the Exchequer, what assessment he has made of the potential benefits of crypto (a) currencies and (b) assets to society.

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

The government’s ambition is to make the UK a global hub for cryptoasset technology and investment. In April, previous Ministers set out a number of reforms which will see the regulation and aspects of tax treatment of cryptoassets evolve.

The Bank of England’s Financial Policy Committee has noted that the underlying technologies behind cryptoassets could bring a number of benefits to financial services, including reduced transaction costs and greater operational resilience.

For instance, certain stablecoins could drive transformational changes in financial markets and offer consumers new ways to transact and invest. Increased competition between existing UK payment systems could also potentially lead to lower costs and improved services in the long run. The Financial Services and Markets Bill will allow HMT to bring stablecoins within the regulatory perimeter where they are used as a form of payment. This legislation will ensure that the UK’s regulatory framework is equipped to harness benefits of stablecoins, supporting the adoption of cutting-edge technologies, while mitigating the potential risks.

Recent events in cryptoasset markets have highlighted the importance of establishing regulation which supports safe innovation and protects consumers and stability. The government will consult on its approach to regulating wider cryptoasset activities in the coming weeks.

The government and the Cryptoasset taskforce continue to closely monitor the wider cryptoasset market and will stand ready to take further regulatory action if required.

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