Cryptocurrencies

Cryptocurrencies and related innovations present a variety of opportunities for British businesses and the economy as a whole. I believe it is vital we have a regulatory framework which protects consumers, ensures the integrity of the financial system and also encourages innovation.

In terms of government-led Bitcoin mining, although an interesting idea, I do not believe that a UK Government investment in the mining of cryptocurrencies would necessarily be the best use of taxpayers’ money. It is important to note that Bitcoin mining is very energy intensive and any Bitcoin holdings would be exposed to a high degree of price volatility.

The Distributed Ledger Technology (DLT) underpinning cryptocurrencies, has numerous potential applications and is something I know the Government takes a keen interest in. The prospect of so-called ‘stablecoins’ could lead to faster and cheaper payments which take advantage of cryptoassets not disadvantaged by the instability which we see with many existing cryptocurrencies.

I welcome the consultation which the Government is conducting into cryptoassets and stablecoins and their regulation. I look forward to the Government’s response to the feedback it received during the call for evidence which ran until 21st March 2021.

I welcome that HMRC has now produced a Cryptoassets Manual which explains their tax treatment. This manual can be accessed here: https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual