The Government is to set up a taskforce for crypto assets in an effort to combat the potential risks in the sector while also capitalising on its benefits.

Representatives from HM Treasury, the Bank of England, and the Financial Conduct Authority will sit on the taskforce, which is being launched as part of a wider fintech strategy.

The cryptocurrency market has witnessed huge growth over the past year and the global sector is now worth an estimated $300bn (£212bn), although it is not regulated.

Chancellor of the Exchequer Philip Hammond said: “From the Square Mile in London to Scotland’s Silicon Glen, the UK leads the world in harnessing the power of fintech as we create an economy fit for the future. I am committed to helping the sector grow and flourish, and our ambitious Sector Strategy sets out how we will ensure the UK remains at the cutting edge of the digital revolution.

“As part of that, a new task force will help the UK to manage the risks around crypto assets, as well as harnessing the potential benefits of the underlying technology.”

Last month, the Treasury Select Committee launched an inquiry into digital currencies and the opportunities and risks they pose to consumers, businesses, and the government.

At that time, chair of the committee, Conservative MP Nicky Morgan, said: “We will also examine the potential benefits of cryptocurrencies and the technology underpinning them, how they can create innovative opportunities, and to what extent they could disrupt the economy and replace traditional means of payment.”