Dáil Éireann Debate, Tuesday - 8 September 2020
307. Deputy Pearse Doherty asked the Minister for Finance the number of times and the dates on which the working group to monitor cryptocurrency development has met since its establishment; and if he will make a statement on the matter. [22314/20]
View answerI would like to thank the Deputy for this query, as it allows me to throw light on the work undertaken by this Department in an extremely complex and technical area.
The aims of the Intra-Departmental Working Group are as follows:
- to monitor developments at a global (example: Financial Stability Board, Financial Action Task Force, International Monetary Fund) and European level (example: European Commission, European Parliament and European Central Bank) in relation to virtual currencies and blockchain, and to provide input into the discussions as and when required
- to build knowledge of developments in the technology with an aim to identify risks and assess potential economic opportunities for Ireland;
- to engage with subject matter experts across industry, academia and the private sector to help build a dynamic communication flow;
- to liaise with other areas of government to assess where involvement might be required;
- to consider whether suitable policy recommendations are required;
- to assist in promoting a better understanding of the technology across government;
- to align with Ireland’s IFS2020 Strategy to foster opportunities in international financial services by building on the country’s strengths in technology, research and financial services.
The aims of the working group, as stated above, clearly set out a holistic approach to the technology, its potential benefits and risks. Monitoring of cryptocurrencies (a subset of crypto assets, which are a subset of digital assets), would too narrowly focus on one of the applications of blockchain technology.
The impact of blockchain technology has been felt on every division of the Department: payments, consumer protection, securities and capital markets, economics, taxation and anti-money laundering. Considering this cross-cutting impact, the working group was set up with a dedicated small team as coordinator, the financial advisory team, part of the Shareholding and Financial Advisory Division.
The financial advisory team have acted as the “spoke” in the wheel, reaching out to each expert division as and when required. The team acted as both a source of technical knowledge for the department and an anchor of the department’s views, as developments in the technology occurred (and continue to do).
This agile structure has provided the department three significant benefits:
- continuity of expertise knowledge, residing in the “spoke” centre, even as department staff moved roles
- consistency of approach vis a vis cryptoassets and blockchain technology, irrespective of the division
- clarity of line of engagement, internally, across government and with the wider blockchain ecosystem in Ireland and abroad.
Understanding of this set up, and aims, of the working group is of utmost importance in order to answer the Deputy’s question.
A list of meetings and dates as requested, for the “spoke” team for example, involve a list of almost daily meetings and interactions for the last 3 years. Their time commitment supporting the aims of the working group was 25-30% of their daily work in year 1. Due to the number and pace of developments in this area, time allocated to supporting these aims increased to a significant majority of their time.
As knowledge and interest in cryptoassets grew globally, particularly over the last 2 years, so did the number of deliverables across the department. Engagement has thus been on a need-basis, maintaining consistency always with the financial advisory team. Meetings have either followed an ad-hoc request for technical information (e.g. STO’s) or ongoing support over a long period of time (e.g. 5 AML regulation).
I measure the effectiveness of the working group not by the number of times it has met, but by the work that the department has produced, the quality of the briefings and the reputation is has built in Ireland, at EU and global level, in a very complex topic. I would draw the Deputy’s attention to the Department’s website which contains additional information at the following link: www.gov.ie/en/publication/67039d-b/
As an example of the effectiveness of the working group, I would like to draw the Deputy’s attention to the following:
- Engagement at European level:
- the European Commission’s Fintech Action plan report
- the EU Blockchain Observatory & Forum.
- the European Blockchain Partnership.
- European Commission’s consultation on cryptoassets.
- INATBA (https://inatba.org/organization/)
- Engagement at Global level:
- Member of OECD’s Ad hoc Expert Group on Finance and Digitalisation
- Member of OECD’s Blockchain Advisory Group
- Member of Government Blockchain Association (GBA)
- Member of Global Digital Finance (GDF)
- Member of World Economic Forum – Digital Currency Governance Consortium
Additionally, I would like to draw the Deputy’s attention to the work undertaken by the working group to engage experts and liaise with stakeholders, in order to continue to build upon the Department’s knowledge of this technology. An example of this was the hosting of a government wide blockchain event in late January 2019, when the Department of Public Expenditure and Reform and the Department of Finance hosted a ‘blockchain hackathon’ in the Trinity Innovation Centre. The event saw nine teams of software developers competing to solve a number of technical challenges from across Government: www.blockathonireland.com
Finally, the department has ongoing engagement academia, Enterprise Ireland, private sector and the IDA via the ‘Blockchain Ireland’ initiative. Blockchain Ireland is an IDA-led forum established as a vehicle to promote and enhance the blockchain industry in Ireland: www.blockchainireland.net
