26 November 2014

Bitcoin firms meet UK govt officials as regulation looms

06 September 2013  |  7200 views  |  1 bitcoin

Representatives from the bitcoin community met UK government officials in Downing Street this week amid claims that the Financial Conduct Authority is considering regulating the virtual currency.

Representatives from small banks, finance houses and bitcoin start-ups met with civil servants from government departments, including Business, Innovation and Skills on Wednesday.

Traditionally, bitcoin's greatest attractions to users have been its anonymity and position outside of the regulated economy.

However, Tom Robinson, founder of virtual currency exchange BitPrice, told the Guardian that at Wednesday's meeting he and others were advocating regulation as a way to legitimise the currency and promote new business and economic growth.

Robinson says that the main gripe within the industry is that banks are blocking the creation of new accounts for money remittances, possibly in the wake of the £1.2 billion fine levied against HSBC last year over anti-money laundering failures.

Removing bitcoin's anonymity and bringing it into the regulatory fold would make it more appealing to banks and Robinson told City AM that the FCA is now "looking at Bitcoin and seeing how it fits into existing regulations".

The Downing Street meeting is the latest sign that large parts of bitcoin community have decided that, despite its anarcho-libertarian roots, the currency must engage with governments.

In July, several major firms in the field banded together in a bid to create a self-regulatory organisation - the Digital Asset Transfer Authority (Data) - covering the nascent industry.

Last month Bitcoin Foundation representatives met with a host of US law enforcement agencies and regulators in Washington to discuss oversight of the digital currency.

And in Germany, moves have already been taken to bring bitcoin into the formal economy, with the government declaring it a "unit of account," making it a kind of "private money" that is subject to taxation.

Comments: (1)

Clive Munn - Misys International Banking System - Luxembourg | 09 September, 2013, 06:58

Whilst it is clear that the world economy needs to be better aware of and to understand the bitcoin community as weel as other, similar, non regulated economies, is it essential that these have to be taxed and does this not then convert them into the same thing as our existing, potentially corrupt economies?

My understanding is that they should remain personal, yet open to everyone. In this way they are available to be shared by everyone without the need to tax those involved in order to distribute the benefits to the wider community. In fact, it seems to me that taxing and regulating such initiatives destroys their 'raison d'être'. Of course any corrupt practice needs to be regulated but in my view we have to ensure that barter and sharing amongst each other is encouraged rather than punished if we are to develop a better society beyond the bad and greedy side of capitalism! 

I look forward to your responses

Clive Munn

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