Bitcoin to be Regulated Soon by the U.K. according to Treasury Report
The UK Treasury report has revealed that several initiatives involving digital currency will be taken in the near future.
This historic report came at the time of the Chancellor of the Exchequer’s annual budget speech.
The announcement can be seen as the government’s first move to assert its authority over the digital currency by imposing regulation and forming policies that deal with consumer safety issues revolving around cryptocurrencies active in the United Kingdom.
The good news for the Bitcoin community is that there isn’t much negativity towards cryptocurrencies in the report.
As a matter of fact, the report suggests that digital currencies have a huge role to play as payments technology in the future.
With that being said, the report was quite clear in highlighting the risks attached with the use of digital currencies. Here is an excerpt from the report itself which sheds further light on the topic.
“The government considers that digital currencies represent an interesting development in payments technology ... the potential advantages are clearest for purposes such as micro-payments and cross-border transactions."
The most notable aspect of the announcement is the government’s decision to introduce anti money laundering regulations, abbreviated to AML, to digital currency exchanges which will certainly beef up the security of these unconventional financial institutions.
The report also states that the HM Treasury will not go about its business without first taking into account the opinions of the digital currency based companies and the general public who have a certain interest in the world of cryptocurrency.
The government is basically looking feedbacks on certain important questions that will help them formulate the perfect regulation.
For example, the government is seeking advice on who should fall under obligatory regulation and which institutions should be assigned the role of the regulator.
The public consultation that is to be carried out will deal with topics such as law enforcement.
This is being done in an attempt to ensure that cyber crime, which has been a huge problem for digital currencies, can be prevented and even eradicated to a certain extent.
Anyone who illegally uses digital currencies will be brought to justice and their illicit assets will be seized by the government.
According to the report, AML rules are a must have for exchanges in order to facilitate innovation in the industry and negate the effects of illegal digital currency based activities.
This particular Treasury Report stems from a call for information on digital currencies that took place in the November of 2014.
The call for information resulted in a resounding response with more than 120 digital currency companies, banks, payment firms, academics and other government departments and agencies stepping up.
Another notable piece of information in the report is the reason cited for the rocky relationship between banks and digital currency businesses.
According to the report, banks are not too keen on digital currency businesses due to the absence or lack of regulation employed by the government.
Putting the AML rules in action is likely to build the bridges between banks and digital currency businesses.
However, the introduction of this regulation should yield positive results for Bitcoin, as it should bring higher security for investors.