Last updated on March 20th, 2015 at 01:47 am
Following the UK Treasury’s announcement that the country has a plan to regulate digital currency, different organizations connected to cryptocurrency have made their opinions public. And the general reaction is quite positive.
The British Treasury released a new report that includes a new series of regulatory initiatives. The document was presented in conjunction with the Chancellor of the Exchequer’s annual budget traditional speech on Wednesday (18th).
“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 report said, confirming that the British authorities see the benefits of Bitcoin’s technology.
The most significant initiative presented by the UK Treasury includes the application of anti-money laundering regulations to cryptocurrency exchanges.
The news was welcomed with open arms by groups like the UK Digital Currency Association (UKDCA), a British advocacy group for digital currency and blockchain technologies. “By providing regulatory clarity and legitimacy to digital currencies and related businesses, specifically around anti-money laundering requirements, the UK is set to be well placed to exploit these technologies and remain at the forefront of fintech innovation,” the association said in a press release.
The new Bitcoin package was developed following UKDCA’s own recommendations to the Treasury regarding anti-money laundering regulations and “the development of standards in this area with the British Standards Institution (BSI)”. The group confirmed it will keep working with the BSI on the administration of this process, a partnership that is being encouraged by the government.
Tom Robinson, one of UKDCA’s board member, said that the “announcement is significant in that it brings Bitcoin and other blockchain technologies closer to mainstream adoption”.
The UKDCA is pleased that its recommendations have been adopted and will be leading the process with the BSI to develop industry standards.
The involvement of the UK pro-Bitcoin group in official matters is not new. Back in March 2014, UKDCA members helped persuade the HMRC (Her Majesty’s Revenue and Customs) to revise their guidance on the taxation of digital currencies.
Bitcoin companies happy with announcement
UK-based digital asset services company Elliptic (one of the founding members of UKDCA) also commented on the Treasury’s new measures.
“The Treasury Response represents very encouraging progress in several key areas: Anti-Money Laundering, consumer protection, and technical standardisation,” said the COO and co-founder of Elliptic, Nathan Jessop.
Prioritising AML will bring much-needed legitimacy and clarity to the industry, and hopefully encourage banks to engage more with digital currency businesses. Furthermore, allowing the industry to develop its own consumer protection and technical standards will promote collaboration and innovation much more efficiently than top-down regulation.
The company has been “fully aligned behind these initiatives” and “actively developing compliance tools to directly address the Treasury’s AML concerns.”
Furthermore, Jessop classified the Treasury’s approach to cryptocurrency regulation as “pragmatic, collaborative and priority-driven”. The authorities not only plan to study the best way to apply anti-money regulations to digital money, but also intend to spend £10 million extensively researching the digital currency technology.
“The Treasury’s willingness to work alongside entrepreneurs to promote financial innovation while working tirelessly to protect consumers is a main reason the UK holds its place at the forefront of fintech innovation globally,” the Bitcoin entrepreneur added.
Elliptic sees the $10 million investment in research as an essential step. The money will be allocated to two different institutions: Digital Catapult and the Alan Turing Institute, both experts in data analysis.