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<p>Digital currencies, and the distributed ledger technology that underpins them,
have the potential to bring innovative services and products to UK customers and firms
– particularly in areas like international transfers.</p><p> </p><p>The Chancellor
announced in March 2015 that the Government will bring digital currency exchange firms
into regulation in the UK to help the legitimate industry flourish, and to create
a hostile environment for illicit actors. We will publish proposals on this regulatory
regime in due course.</p><p> </p><p>As outlined in Deputy Governor, Ben Broadbent’s
recent speech, the Bank of England is also exploring this emerging sector and the
implications it could have for monetary and financial stability as part of its broader
research agenda.</p><p> </p><p>Separately, academics at University College London’s
(UCL) digital currency research centre have also been looking at how the distributed
ledger technology that underpins digital currencies could be harnessed by central
banks. The Government is encouraged to see this research from one of the UK’s world-leading
universities. However, this a theoretical paper by an independent institution, separate
from the Bank of England’s work and from Government policy.</p><p> </p><p>It is the
Government’s ambition to foster the growth of legitimate digital currency firms as
part of the wider FinTech ecosystem here in the UK. As part of this, the Government
will consider the wider implications of a growing digital currencies sector for the
financial services sector and the economy as a whole. Some parts of Government are
also looking at how the benefits of distributed ledger technology can be harnessed
to deliver greater innovation. However, the Government and the Bank of England do
not currently have any plans to introduce a centrally issued digital currency.</p><p>
</p><p>The UK has been rated as having the world’s leading FinTech ecosystem in a
recent global benchmarking exercise and attracted c. £524mn in investment in 2015.</p><p>
</p><p> </p>
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