UK Chancellor of the Exchequer in no discussions with BoE over state-backed digital currency

Maria Nikolova

The Chancellor has not had any formal discussions with the Bank of England about a state-backed digital currency, says John Glen.

There seems to be no warming up in the UK about state-backed digital currencies, as indicated by a comment provided by John Glen, Economic Secretary, HM Treasury, on Monday, September 10th.

John Glen was responding to a question from Adam Afriyie, of the Conservatives. Mr Afriyie wanted to ask the Chancellor of the Exchequer, whether he has had discussions with the Bank of England on the establishment of a state-backed digital currency.

In response, John Glen stated that:

“The Chancellor has not had any formal discussions with the Bank of England about a state-backed digital currency”.

He added that whereas the Bank of England is not planning to create a central bank-issued digital currency, it has been carrying out research to understand any potential implications.

This is not the first time that John Glen has to answer to questions related to cryptocurrencies. In March this year, he explained that the Government “currently has no plans to recognise digital currencies as legal tender or to propose designating them as financial instruments”.

On February 22, 2018, the UK Treasury Committee opened a new inquiry into digital currencies and distributed ledger technology (DLT). The inquiry aims to explore the role of digital currencies in the UK, including the opportunities and risks that digital currencies may generate for consumers, businesses, and the Government. It will also examine the potential impact of DLT – such as blockchain – on financial institutions, including the central bank, and financial infrastructure.

There is no regulation of digital currencies in the UK apart from regulation of certain products related to them, like CFDs based on cryptocurrencies. We are still waiting for the Financial Conduct Authority (FCA) to announce anything particular with regard to taskforce dedicated to dealing to cryptocurrency matters.

Between June 1, 2018 and July 31, 2018, a total of 203 reports of fraud involving cryptocurrency were filed with Action Fraud. The total reported loss was £2,059,501.29. In some cases, victims have realised that they have been defrauded, but only after the website has been deactivated and the suspects can no longer be contacted.

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