UK Govt has no plans to encourage mining of cryptoassets

In the face of the recent publication of a Report on crypto-assets by the UK Treasury Committee and the report by the Cryptoassets Taskforce, consisting of HM Treasury, the Financial Conduct Authority and the Bank of England, questions about the present status and the future of cryptoassets keep coming in.

On Tuesday, January 8, 2019, Lord Bates, Minister of State at the Department for International Development, replied to one such question.

Lord Taylor of Warwick has asked “Her Majesty’s Government what plans, if any, they have to encourage the mining of crypto-currencies in the UK; and if so, what steps they are taking to support such projects”.

In response, Lord Bates said:

“The Government currently does not have any plans to encourage the mining of cryptoassets in the UK”.

Let’s recall that, in its report, the Cryptoassets Taskforce has identified a raft of risks associated with cryptoassets, including:

• risks of financial crime, including opportunities for cryptoassets to be used for illicit activity and cyber threats;
• risks to consumers, who may buy unsuitable products, face large losses, be exposed to fraudulent activity, struggle to access market services, and be exposed to the failings of service providers;
• risks to market integrity, which may lead to consumer losses or damage confidence in the market;
• potential implications for financial stability, which may arise if the market grows and cryptoassets are more widely used.

The FCA is poised to consult on a prohibition of the sale to retail consumers of all derivatives referencing exchange tokens such as Bitcoin, including CFDs, futures, options and transferable securities, the Report said.