The UK Treasury Is Embracing Block Chain, Digital Currencies and Big Data Research
The UK Government’s Ministry for Economy and Finance – Her Majesty’s Treasury, tasked with setting the UK’s future economic policies is steadfast in its approval and welcoming of blockchain technology and digital currencies.
It started when the UK Treasury issued a public call in November 2014, seeking inputs for ways to effectively regulate digital currency.
“What are the potential benefits of (this) distributed ledger technology? How significant are these benefits?” was one of 13 questions asked during the “call for information”; while fully acknowledging the fact that intermediaries such as banks wouldn’t be needed in such a system.
In March 2015, a 28-page document was released by HM Treasury as a direct result of the public call, detailing its plans to foster an environment for legitimate users of digital currency while ensuring that criminal activities making use of digital currencies are restricted to a minimum. Furthermore, the government noted the promise that came with “distributed ledger technology.”
Significantly, the Government also increased funding for research into digital currency technology by £10 million.
Research and Investment into Distributed Ledgers
Yesterday, at the Alan Turing Institute for Data Science in London, Harriet Baldwin MP spoke of the desire to attract digital currency businesses and investors into the UK.
The secretary gave an example of bitcoin startup Circle’s plans to expand into Europe by opening an office in London, adding that the UK’s generally positive attitude to digital currencies is already working.
She disclosed an increase in research funding of a further £10 million into understanding the opportunities and challenges for distributed ledgers while noting “the potential to facilitate the fast, efficient, and secure transfer of ownership of digital assets – including bonds, shares, and other financial instruments, over the internet.”
A Destination for Fintech
During her speech, the secretary proclaimed the UK accounts for 42% of all European FinTech investment that reached £410 million in 2014, a year where 135,000 people in the UK were employed in the sector.
“Ultimately, FinTech is simply a means of providing financial services in a new way,” Baldwin added.
She discussed the setting up of a “Working Group” comprising of members and stakeholders from the banking sector, fintech industry and the government to create an open standard for
Application Programming Interfaces (APIs) in order to foster competition and innovation among the UK banking sector.
This might prove to be entirely necessary, with the UK government’s commitment to bring digital currency exchanges into regulation. This has been welcomed by the industry and several digital currency businesses such as Circle are relocating to the UK, according to Baldwin.
Big Data. Quantum Computing?
Despite the lack of an explicit mention of quantum research and computing, it was perhaps apt that the secretary spoke about ‘big data and algorithm research,’ at the Alan Turing Institute.
Elaborating on a £42-million investment over 5 years, Baldwin was clear about the UK’s commitment to research and insights into multiple sectors including that of the public and the financial realms by bringing together leaders in computer science and advanced mathematics.
Counting partners such as the London School of Economics and various financial institutions, including CitiGroup, RBS, Barclays and others, a new installation called the UK Ph.D. Centre for Financial Computing has been set up. There is courting for students with postgraduate skills in software engineering, high-performance computing, and mathematical modeling.
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