Bitcoin latest: UK government announces 'crypto task force' to guard against dangers of digital currencies

Treasury to collaborate with Bank of England and Financial Conduct Authority on new body

The Government has launched a task force to guard against the risks posed by digital currencies such as bitcoin.

The Treasury on Thursday announced that it will collaborate with the Bank of England and the Financial Conduct Authority to form the Cryptoassets Task Force which will aim to put the UK at the forefront of harnessing the potential benefits of the technology.

Cryptocurrencies have garnered huge interest over the last twelve months as values have soared, but many experts have also warned that consumers can lose large amounts of money by investing in the volatile assets.

The Treasury also announced plans for “robo-regulation” which will aim to help firms build software that ensures they automatically comply with new rules, saving time and money.

A new partnership between the UK and Australia, allowing financial technology firms from the respective countries to sell their products in both nations was also unveiled on Thursday. The so-called fintech bridge will help the two countries to harmonise policies for the sector and increase cooperation on new regulation.

“From the Square Mile in London to Scotland’s Silicon Glen, the UK leads the world in harnessing the power of fintech as we create an economy fit for the future,” said Chancellor Philip Hammond.

“I am committed to helping the sector grow and flourish, and our ambitious sector strategy sets out how we will ensure the UK remains at the cutting edge of the digital revolution,” he said.

“As part of that, a new task force will help the UK to manage the risks around cryptoassets, as well as harnessing the potential benefits of the underlying technology.”

The new strategy comes after data released in January revealed that a record amount of money flowed into the UK tech sector last year despite uncertainty around the implications of Brexit.

Tech firms attracted close to £3bn in venture capital funding during the 12 months to the end of December, according to data compiled by the Mayor of London's official promotional agency, London & Partners. That was almost double the £1.63bn attracted throughout 2016.