Last week the conservative party was re-elected to power in England. This article looks at what the plans for Bitcoin regulation might look like and whether the party will be able to create a central hub for Bitcoin.
Only in April, the English government published its attitude towards Bitcoin demanded further information: “The government plans a new anti-money laundering law for the regulation of digital currencies in England. The aim is to support digital currencies and prevent criminal abuse. The government will convene a formal hearing in the next parliament.”
The planned regulation is not a reason for companies to flee to the mountains or to move to Silicon Valley. Even though the word “regulation” is usually not a welcome word, it can also be very helpful for the further development of Bitcoin in this case.
In addition, the Bank of England (BoE) is very optimistic about the news spy
In February, the Bank published the news spy report which concludes: “Even though the private digital currencies are still flawed, resulting in a currently still high volatility, the technology based on Bitcoin is very promising and not a scam.
The BoE had also mentioned the possibility of creating its own Bitcoin-based digital currency.
The BoE promised to support digital currencies no matter which new party came to power. Fortunately, the BoE and the recently elected conservative party share the same position.
Chancellor of the Exchequer welcomed the BoE’s position and spoke on Twittr:
“It is good that the BoE is taking care of the digital currencies – it is important that consumers benefit from the new technology and that Fintech companies can thrive.
geroge osborneThe government is hopeful that the forthcoming regulation will be in favour of digital currencies.
As promised by the government, a formal hearing will probably take place this summer with the new parliament. Until then, we can only imagine what the new Bitcoin regulation will look like.
However, with the government’s comments so far, we can expect the following:
The regulation will initially apply only to exchanges trading fiat and digital currencies.
The Know-Your-Customer (KYC) procedure will be necessary to make Bitcoin transactions less anonymous.
Existing anti-money laundering laws may be adopted
Law enforcement authorities will be entitled to confiscate illegally used Bitcoin assets
HM Treasury will create a sanbox for FinTech start-ups and test the regulation
With the newly elected government, England offers great potential to become an international hub for Bitcoin. Not least because of the strong FinTech industry, but also because of the promising regulatory approaches and proposals from the government. Nevertheless, the Bitcoin industry should not rejoice too early. The regulatory challenges and the integration of Bitcoin into the traditional financial system at the global level can also lead to problems.