Bank for International Settlements (Immunities and Privileges) Order 2021

Debate between Lord Duncan of Springbank and Baroness Wheatcroft

Wednesday 10th February 2021 Grand Committee

[Baroness Wheatcroft (CB) [V]]

My Lords, I welcome the establishment of the hub in London, which is renowned for its skills in the financial sector and in regulation. This testimony to that is therefore very welcome. I understand why a degree of what we might call diplomatic immunity may be required, although the total freedom from immigration restrictions is interesting because we have huge pools of labour in this country that could do the work that I guess will be done within the hub. Could the Minister say whether those who will be coming into the UK to work at the hub, and will come in free of any immigration controls, will actually be doing jobs that could perfectly easily be done by the many skilled people we have in the City of London?

More broadly, I welcome the areas in which the innovation hub will be involved. It will play to the strengths of the City and those areas where we are renowned, particularly fintech, which is a growing sector in the UK, and regulation, where we like to think we are ahead of the curve. I am not always so sure of that. However, we are told that one area that the hub will be looking at carefully is that of central bank cryptocurrencies and how these should be regulated. My real question is allied to that because I am deeply concerned about the growth, not in central bank cryptocurrencies, but in cryptocurrencies generally. Noble Lords will have seen that the price of bitcoin, which fluctuated hugely in January, between $34,000 and $47,000, has again leaped into the news because Elon Musk is putting $1.5 trillion into it. While the founder of Tesla can afford to lose $1.5 trillion, although I am convinced he has no wish to do so, my concern is that a lot of people will be persuaded to put hard cash into bitcoin because Elon Musk has done so, and their money will be at risk.

Bitcoin is not regulated; indeed, none of the cryptocurrencies is regulated as such. Derivatives of cryptocurrencies are regulated. I think that the time has come for the UK to lead the way in regulating completely these new and potentially very dangerous currencies. The US is beginning to look at this and the SEC is now considering whether to prosecute XRP, which, far from being a currency, looks like a scam. I fear that there may well be more of these, so I would be grateful if the Minister could tell me whether he has any means of persuading the innovation hub in London to pioneer regulation—[Inaudible.]

[The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)]

I think we got the gist. I call the next speaker, the noble Lord, Lord Kirkhope of Harrogate.