UK to regulate cryptocurrencies (Wired UK)


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The government has announced its intention to apply anti-money
laundering regulation to digital currency exchanges in the UK. It
is hoped that regulation will not only prevent criminal use of
digital currencies, such as Bitcoin, but support
innovation.

Regulation would be intended to ensure the environment was ready
to allow digital currencies to flourish, while at the same time
discouraging those who wanted to use digital currencies for illicit
reasons.

Ideally the environment would allow for the fast, efficient and
secure transfer of ownership of anything of value over the
internet. It could guarantee that a secure and permanent record is
made of what had taken place, without the need for a third party to
oversee the process.

The announcement was made in a document titled Banking for the 21st Century released with the 2015 Budget.
Also announced was a £10m research initiative that will bring
together the Alan Turing Institute and Digital Catapult councils to
address opportunities and challenges for digital currency.

“Digital currency technology makes it possible to transfer the
ownership of anything of value over the internet quickly,
efficiently and securely,” said Universities, Science and Cities
Minister Greg Clark. “This new £10 million research initiative
gives the UK an excellent opportunity to become the world leader in
developing the potential benefits of this technology, and the uses
it could have in the wider economy.”

The government has also committed to working with the British
Standards Institution and the digital currency industry to develop
voluntary standards for consumer protection. The hope is that the
technology can be adopted by banks and non-banking providers in
order that they will be able to compete in the market, either by
introducing new products, or by delivering existing products more
efficiently. The Bank of England has already stated its intentions
to undertake its own research into a central bank-run digital
currency system.

According to the document, the government wants to put the UK
“at the forefront of the development of digital currencies” in
order to “make it the location of choice for digital currency and
related tech firms”. Bitcoin-based company CoinJar is namechecked
as an example of the kind of talent the UK has already attracted in
this field. The hope is that consumers and the wider economy will
benefit as a result of more digital currencies being based in the
UK.

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18 March 2015 | 5:57 pm – Source: wired.co.uk

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