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UK Government: Carefully Taking Steps Towards Regulating Exchanges

Recently the UK government's plans to regulate digital currencies were revealed. The government had first announced it's intentions to pose regulations on digital currencies in August 2014. After a call for information the HM treasury posed to the public back in November, they are now responding to the received submissions.

The published document "outlines the government's views and proposed next steps". According to the next steps that were indicated inside this document, the governments decision to apply "anti-money laundering regulation to digital currency exchanges in the UK" is taking place with the intention to support innovation and prevent the currencies from being used for criminal purposes.

Additionally, there's a new research initiative launched by the government. It's aiming to "address the research opportunities and challenges for digital currency technology". It was also mentioned that funding of £10 million is going to be available for research in this area.

Things looking positive for bitcoin

After the government revealed its decision to regulate digital currency exchanges, experts welcomed it. It most certainly looks like the government has taken a friendly stance towards digital currencies. Many bitcoin users have voiced their concerns about regulation, claiming that it could limit innovation and startups. However, it seems that the UK government is trying to avoid this kind of regulation as they seem to recognize the benefits and numerous applications digital currencies can have.

Could the UK become the world's bitcoin capital?

The recently revealed regulations are supposedly aiming to "promote competition and innovation in payment systems". In fact, we have been getting signs that the UK officials want to help the country come closer to becoming the world's capital for digital currencies. In fact back in August 2014, The UK Treasury revealed that it's looking to turn the UK into a centre for virtual currency trade.

The objectives for digital currency the UK government has set

While it's obvious that the innovative aspect of digital currencies and the blockchain is handled carefully, the government also wants to tackle criminal activities and support the development of the sector.

  • to provide clarity and certainty on the application of existing legislation and regulation for users, businesses and other parties dealing with digital currencies

  • to limit any opportunities for criminals or terrorists to use digital currencies for illicit activities, and to support the effective identification and prosecution of illicit activity that does take place

  • to create the right environment for legitimate digital currency entrepreneurs to flourish, including supporting the provision of banking and other financial and professional services to legitimate digital currency firms

  • to support the research, development and application of new technology, to promote competition and innovation in payment systems, financial services and other relevant sectors

  • to support monetary and financial stability in the UK, by monitoring the extent of usage of digital currencies in the UK and regularly assessing the risks posed

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MLA 2017 18 Shortlisted 2