Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what estimate they have made of the amount in tonnes of carbon dioxide equivalent emissions that cryptocurrencies were responsible for in (1) the UK, and (2) the world, over the last 12 months.
Answered by Lord Agnew of Oulton
The Government has been monitoring developments within the cryptoasset industry, including rising energy usage.
The Cryptoasset Taskforce, comprising HM Treasury, the Financial Conduct Authority, and the Bank of England, considers the impact of cryptoassets and assesses what, if any, regulation is required in response. The Government stands ready to respond to emerging risks or changes in the market and will continue to monitor developments in cryptoassets.
In November 2020, the Chancellor announced that the UK will implement a green taxonomy – a common framework for determining which activities can be defined as environmentally sustainable – which will improve understanding of the impact of firms’ activities and investments on the environment and support our transition to a sustainable economy. More details on the green taxonomy will be announced in due course.
The Government has already taken action to ensure the UK is the world-leading centre for green finance including through announcing an intention to make disclosures aligned with the Taskforce on Climate-related Financial Disclosures (TCFD) fully mandatory across the economy by 2025, making the UK the first country to do so.
The Government is committed to upholding its pledge relating to the Paris Climate Agreement and have enacted a legally binding target to reach net zero greenhouse gas emissions by 2050. Between 1990 and 2018, the UK reduced its emissions by 43% while growing the economy by 75% – the best performance in the G7 on a per person basis and will continually assess any emerging environmental threats.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government whether managing the high energy impact of cryptocurrencies will be on the agenda at COP26.
Answered by Lord Agnew of Oulton
The Government’s private finance objective for the upcoming COP26 climate change forum is to ensure that every professional financial decision takes climate change into account. The recovery from COVID-19 will determine the mitigation and adaptation pathways for decades to come.
The finance campaign will provide the conditions for a future that is genuinely greener, more resilient and more sustainable than the past. Action on finance underpins all the other COP campaigns: adaptation and resilience, energy transition, nature and zero-emission vehicles. Without the right levels of finance, the rest is not possible.
The Government has already taken action to ensure the UK is the world-leading centre for green finance including through announcing an intention to make disclosures aligned with the Taskforce on Climate-related Financial Disclosures (TCFD) fully mandatory across the economy by 2025, making the UK the first country to do so.
Additionally, the Government has committed to the implementation of a green taxonomy. This will allow us to accelerate our work towards a greener financial sector, by providing a common definition for environmentally sustainable economy activities.
The Cryptoasset Taskforce, comprising HM Treasury, the Financial Conduct Authority, and the Bank of England, considers the impact of cryptoassets and assesses what, if any, regulation is required in response. The Government has been monitoring developments within the cryptoasset industry, including rising energy usage.
The Government is committed to upholding its pledge relating to the Paris Climate Agreement and have enacted a legally binding target to reach net zero greenhouse gas emissions by 2050. Between 1990 and 2018, the UK reduced its emissions by 43% while growing the economy by 75% – the best performance in the G7 on a per person basis and will continually assess any emerging environmental threats.
Asked by: Daniel Kawczynski (Conservative - Shrewsbury and Atcham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what comparative assessment he has made of the Financial Conduct Authority's regulatory approach to (a) digital and (b) currencies; what recent assessment he has made of the potential effect of UK financial regulation of digital currencies on their development; what assessment he had made of the adequacy of the steps being taken to support new business and innovation in this area in the UK; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is committed to retaining its global leadership position in fintech and fully recognises its important role in delivering better financial services for people and businesses. The Government also believes that, in practice, this means creating a regulatory environment in which firms can innovate, while crucially maintaining the highest regulatory standards so that people can use new technologies both reliably and safely. This is essential for continuing confidence in the financial system more broadly.
On 10 January 2020, the FCA became the anti-money laundering and counter terrorist financing (AML/CTF) supervisor for cryptoassets firms. A robust AML regime for cryptoassets will help to bolster confidence in the UK as a safe and reputable place to start and grow a cryptoasset business.
To further protect consumers, the FCA has banned the sale of cryptoasset derivatives to retail consumers, and recently issued a warning stating that consumers who invest in cryptoassets should be prepared to lose their money.
The Government has also proposed several further changes to respond to cryptoassets. On 7 January launched a consultation on its regulatory approach to cryptoassets and stablecoins. This set out the view that new and emerging forms of cryptoassets, known as stablecoins, which seek to stabilise their value, could be used as widespread means of payment and potentially deliver improvements in cross-border transactions. At the same time, depending on scale and nature of use, these developments could pose similar financial stability and consumer risks as traditional regulated payment systems.
The Government is considering responses and will outline next steps in due course. Any steps taken in light of this consultation will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.
This measure is being consider alongside a proposal to bring certain cryptoassets, including Bitcoin, into the scope of financial promotions regulation. This would ensure that relevant cryptoasset promotions are held to the same high standards for fairness, clarity, and accuracy that pertain in the financial services industry. The Government will be publishing its response in due course.
Asked by: Lord Lee of Trafford (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what is their response to the research by the Financial Conduct Authority Cryptoasset consumer research 2021, published on 17 June, which estimates that 2.3 million people in the UK own cryptocurrencies and that 14 per cent of those borrowed money to invest in cryptocurrencies.
Answered by Lord Agnew of Oulton
The Government welcomes the FCA’s recent consumer research, which offers insights into the growth of the cryptoasset market in the UK over the past year.
The Government is closely monitoring developments in the industry through the UK’s Cryptoassets Taskforce. HM Treasury and UK authorities have taken a series of actions to mitigate risks to stability and market integrity and prevent the use of cryptoassets in illicit activity.
The Government launched a consultation on its regulatory approach to cryptoassets and stablecoins on 7 January. It also included a call for evidence on the use of Distributed Ledger Technology (DLT) in financial markets. This set out the Government’s position that new innovations in the sector could deliver substantial benefits, but also present new challenges and risks.
Last year, the Government issued a consultation on a proposal to bring certain cryptoassets, including Bitcoin, into the scope of financial promotions regulation. This would ensure that relevant cryptoasset promotions are held to the same high standards for fairness, clarity, and accuracy that pertain in the financial services industry. The Government will be publishing its response in due course.
To further protect consumers, the FCA has banned the sale of cryptoasset derivatives to retail consumers, and alongside the Bank of England has issued consumer warnings stating that consumers who invest in cryptoassets should be prepared to lose their money. Alongside this, the Government launched a new anti-money laundering and counter-terrorist financing regime for cryptoassets in 2020.
Asked by: Philip Davies (Conservative - Shipley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the Government’s consultation on the regulatory approach to cryptoassets and stablecoins, which closed on 21 March 2021, whether it remains the Government’s policy to create a regulatory environment in which cryptoasset firms can innovate.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.
Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.
In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.
The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.
The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.
Asked by: Philip Davies (Conservative - Shipley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 28 May 2021 to Question 6233 on Cryptocurrencies: Regulation, what the maximum length of time is in days that a company has had their application for anti-money laundering / counter terrorist financing registration under review by the Financial Conduct Authority.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.
Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.
In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.
The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.
The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.
Asked by: Philip Davies (Conservative - Shipley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 28 May 2021 to Question 6233 on Cryptocurrencies: Regulation, what the median length of time is in days that a company has had their application for anti-money laundering / counter terrorist financing registration under review by the Financial Conduct Authority.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.
Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.
In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.
The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.
The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.
Asked by: Philip Davies (Conservative - Shipley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 28 May 2021 to Question 6233 on Cryptocurrencies: Regulation, what the mean length of time is in days that a company has had their application for anti-money laundering / counter terrorist financing registration under review by the Financial Conduct Authority.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.
Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.
In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.
The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.
The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of a report by TheCityUK Cryptoassets: Shaping UK regulation for innovation and global leadership', published on 25 May; and what steps they are taking to encourage crypto-based innovation in the UK.
Answered by Lord Agnew of Oulton
The Government welcomes TheCityUK’s contribution on the regulatory treatment of cryptoassets, including their view that the Government should take a proportionate, risk-based approach to regulation, and foster innovation.
The Government has taken a number of actions to mitigate risks and foster innovation in the cryptoasset industry.
The Government established a Cryptoassets Taskforce in 2018, consisting of HM Treasury, the Bank of England, and the Financial Conduct Authority (FCA). The Taskforce’s objectives include exploring the risks and opportunities of cryptoassets, the potential benefits and challenges of Distributed Ledger Technology (DLT) in financial services; as well as assessing what, if any, regulation is required in response.
Last year, the Government issued a consultation on a proposal to bring certain cryptoassets, including Bitcoin, into the scope of financial promotions regulation. This would ensure that relevant cryptoasset promotions are held to the same high standards for fairness, clarity, and accuracy that pertain in the financial services industry. The Government will be publishing its response in due course.
The Government launched a consultation on its regulatory approach to cryptoassets and stablecoins on 7 January. This set out the Government’s position that new innovations in the sector could deliver substantial benefits, but also present new challenges and risks.
The Government is considering responses and will outline next steps in due course. Any steps taken in light of this consultation will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the level of energy use in the mining of Bitcoin, as identified by the Cambridge Bitcoin Electricity Consumption Index; and what steps they will take to address the environmental harms of cryptocurrencies.
Answered by Lord Agnew of Oulton
The Government has been monitoring developments within the cryptoasset industry, including rising energy usage.
The Cryptoasset Taskforce, comprising HM Treasury, the Financial Conduct Authority, and the Bank of England, considers the impact of cryptoassets and assesses what, if any, regulation is required in response. The Government stands ready to respond to emerging risks or changes in the market and will continue to monitor developments in cryptoassets.
In November 2020, the Chancellor announced that the UK will implement a green taxonomy – a common framework for determining which activities can be defined as environmentally sustainable – which will improve understanding of the impact of firms’ activities and investments on the environment and support our transition to a sustainable economy. More details on the green taxonomy will be announced in due course.
The Government has already taken action to ensure the UK is the world-leading centre for green finance including through announcing an intention to make disclosures aligned with the Taskforce on Climate-related Financial Disclosures (TCFD) fully mandatory across the economy by 2025, making the UK the first country to do so.