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UK legislators set out probe into the risks, benefits of digital currencies

The U.K. Parliament's Treasury Select Committee launched an inquiry Feb. 22 into the potential benefits of digital currencies and distributed ledger technology, as well risks associated with them such as market volatility, money laundering and cybercrime.

The inquiry will review risks and benefits of cryptocurrencies such as bitcoin for consumers, businesses and the government. It will also look at the potential impact of distributed ledger technologies, particularly on financial institutions and infrastructures and the central bank.

Treasury committee Chair Nicky Morgan said the public may not be aware that cryptocurrencies are not regulated in Britain "and that there is no protection for individual investors."

The inquiry will also scrutinize regulatory responses from the government, the FCA and the Bank of England and how regulation could be balanced to adequately protect consumers without sacrificing innovation.

While foreign regulators and global financial leaders are clamping down on cryptocurrencies, several small European banks have been offering investors access to them. Switzerland's financial watchdog FINMA introduced guidelines Feb. 16 saying certain types of initial coin offerings will be treated in the same way as securities.