Determining the regulatory fate of cryptocurrencies is complicated. In the UK, the government is still struggling to make any decisions in this regard. The government recently said that it had not formally studied the current price drops and the resulting impact upon the industry in the UK.
Cryptocurrency Regulation in the UK
Similar to most other countries, the UK has no official regulation pertaining to cryptocurrencies. For local users and entrepreneurs, that is far from an ideal situation. The demand for clarification regarding Bitcoin and altcoins has not declined in the past few months. Recent price changes are not making matters easier in this regard.
One of the main pressing problems is how the price fluctuations affect the UK blockchain industry. Cryptocurrency and blockchain are, by definition, two completely different things. Minister of State at the Department for International Development Lord Bates confirms no assessment has been made in this regard. When asked about any government action, Lord Bates responded with:
The Government has not made a formal assessment of any potential implications of recent changes in the value of cryptocurrencies. However, the Government continues to monitor developments in the cryptocurrency market.
Several months ago, the UK government formed a dedicated cryptocurrency taskforce. Known as the Cryptoassets Taskforce, it discusses the risks and benefits of digital currencies and DLT applications. Moreover, one of its priorities revolves around determining if any additional regulatory measures are required moving forward. With no conclusive findings to speak of since March of 2018, an uneasy situation remains in place.
No Immediate Changes Expected
The history of cryptocurrency in the UK has always been interesting to keep an eye on. Until recently, the Bank of England mulled issuing their own digital currency. Those plans are no longer in play, although the idea still remains in place. For now, the BoE is mainly intent on understanding the broader implications of cryptocurrencies.
However, Mark Carney, the governor of the Bank of England, is no fan of Bitcoin. Of the world’s foremost cryptocurrency, he said:
It has pretty much failed thus far on … the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange.
The official stance by the UK government is that Bitcoin is not legal tender. That stance has been in place for a while now and will not necessarily undergo any real changes for the foreseeable future. Recognizing digital currencies as legal tender will have numerous consequences. To date, Japan is the most prominent country to effectively take this approach.
No active Bitcoin regulation in the UK is not necessarily a bad thing. Although clarification will help the industry grow moving forward, the demand for Bitcoin remains relatively high. This is highlighted by the recent expansion by Coinbase. The prominent exchange is part of the Faster Payments scheme. It is a big step toward improving their market position in the United Kingdom.
Do you think the UK will eventually put legislation in place concerning cryptocurrency? Let us know in the comments below.
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