UK’s Digital Economy Theme reports investment of £7.2 million in digital currency technology

The UK Government has shed some light on the funding provided for digital currency technology and associated activities. In a reply to a question by Norman Lamb of North Norfolk, Mr Sam Gyimah, a Conservative MP and Minister of State for Universities, Science, Research and Innovation, has stressed that the Engineering and Physical Sciences Research Council (EPSRC) leads the cross Council Digital Economy (DE) Theme, which incorporates the digital currency technology and associated distributed ledger technology activities, announced in the March 2015 Budget.

To date, the DE Theme has invested around £7.2 million in the following activities:

• A £260,000 project – Third Party Dematerialisation and Rematerialisation of Capital;
• An 18-month £0.4 million project investigating the phenomena of cryptocurrencies and their associated underlying technology – Cryptocurrency Effects in Digital Transformations (CREDIT);
• A £3.7 million for seven interdisciplinary feasibility studies that will explore and understand transformative use cases of distributed ledger technology “Applications of Distributed Ledger Technology”.
• Three projects relevant to research in applications of distributed ledger technology were supported under “Broad applications of distributed ledger technologies” as one of six focal areas in a £10 million call for research proposals on the Trust, Identity, Privacy and Security in the Digital Economy call (2015).

In addition, Innovate UK has funded projects that develop and commercial digital currency technologies with various sectoral applications, related to blockchain and distributed ledger projects for use in areas like provenance tracking of goods. Since 2004 Innovate UK has invested nearly £2 million into these technologies.

The data is provided several days after Mark Carney, Governor of the Bank of England, addressed the possibility of the BoE developing a central bank digital currency (CBDC). Last Friday, he said that “given current technological shortcomings in distributed ledger technologies and the risks with offering central bank accounts for all, a true, widely available reliable CBDC does not appear to be a near-term prospect”.

He advised that it is about time to hold the crypto-asset ecosystem to the same standards as the rest of the financial system. According to him, holding crypto-asset exchanges to the same rigorous standards as those that trade securities would address a major underlap in the regulatory approach.