Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what the Government's policy is on oversight of globally operating electronic payment systems using virtual UK places of business.

There is a robust regulatory regime in place that ensures that appropriate payment systems have regulatory oversight from a financial stability and a competition perspective.

The Banking Act 2009 gives the Treasury the power to specify any inter-bank payment systems to be within the scope of oversight of the Bank of England where disruption to these systems could threaten the stability of the UK financial system, or have serious consequences for business or other interests in the UK.

The Government intends to further strengthen the framework for regulatory oversight through an amendment made to the Digital Economy Bill. This will broaden the types of payment systems that HM Treasury can designate for supervision by the Bank of England to include non-bank payment systems, such as a digital currency network. This will ensure that the Treasury and the Bank of England can respond in a prompt and appropriate manner should a non-bank payment system grow rapidly and become systemically important. There are no such systems at present that the Treasury would wish to specify for supervision.

In addition to this, in April 2015 a new Payment Systems Regulator was launched as the economic regulator for the UK’s payment systems industry, with the objectives of promoting competition, innovation and the interest of end users in the sector.