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The government is to launch a consultation on the risks posed by Bitcoin and other forms of cryptoassets.

Last year the government established a cryptoassets taskforce, comprised of representatives of the Treasury, Financial Conduct Authority and the Bank of England. Its remit was “to explore the risks and potential benefits of cryptoassets and the underlying distributed ledger technology (DLT)”, according to economic secretary to the Treasury John Glen.

The unit ultimately found that, for the time being, the risks are a more pressing concern than the potential benefits, Glen has now said.

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Answering a written parliamentary question from fellow Conservative MP Adam Afriyie, Glen said: “The taskforce’s final report concluded that benefits associated with the use of cryptoassets may arise in the future, but that the most immediate priorities for the authorities are to mitigate the risks posed by cryptoassets to consumers and markets, and to prevent the use of cryptoassets for illicit activity.”

In light of this conclusion, sometime this year the government will undertake a full public consultation. The process, according to Glen, will focus on how authorities can best ensure cryptocurrencies and the wider DLT sector do not negatively impact financial markets.

“The government will consult on its approach to cryptoassets this year,” he said. “In addition, the authorities continue to encourage the responsible development of legitimate DLT and cryptoasset-related activity in the UK.”