The UK government’s Cryptoasset Taskforce met for the first time this week to discuss distributed ledger technology applications in financial services and the need for regulation.
The meeting consisted of senior figures from government and financial regulators, including Katharine Braddick, Director General of Financial Services at HM Treasury, Andrew Bailey, Chief Executive of the Financial Conduct Authority, and Dave Ramsden, Deputy Governor of the Bank of England.
At the meeting, the group agreed on its primary objectives, which include the possible benefits of using cryptoassets in financial services and assessing whether regulation is needed or not.
The Taskforce was first established in April as part of the government’s Fintech Sector Strategy, which broadly looks to understand new technologies in UK finance, including distributed ledger technology. As part of its work, the Taskforce will consider analysis from regulators and government as well as trade bodies, consumer groups and academics.
Andrew Bailey, FCA Chief Executive said: “Cryptoassets have been an area of increasing interest for markets and regulators globally including the FCA. We look forward to working with our counterparts at the Bank of England and the Treasury as part of the taskforce to develop thinking and policy on cryptoassets.”
Dave Ramsden, Deputy Governor of the Bank of England also commented: “The technologies that underpin cryptoassets have the potential to deliver benefits both to the financial system and to the economy it serves. This taskforce will enable us to work closely with the Treasury and the FCA to explore how the opportunities posed by these technologies can be realised, while also tackling the risks arising from cryptoassets.”
At Cloud Expo Europe in March this year, a panel of experts from the UK financial services industry discussed how blockchain technologies might be introduced into the banking ecosystem. The panellists concluded that what was required was collaboration between banks, rather than a push from regulators.
The main stumbling block, argued Thorsten Peisl, CEO of Rise Technologies, is the perception of blockchain. “The industry suffers a number of misconceptions about the adoption of distributed ledger technology,” he said. The next step, he argued, is for the industry to take advantage of the standards that already exist to connect legacy databases with blockchain-based technology.
Keith Bear, VP of financial markets at IBM, argued that what is needed to make this happen is a banking consortium. Whether this will happen remains to be seen, though programs such as the government’s Taskforce may contribute to progress.