Ever since the news broke out that the British government was planning to apply AML regulations to Bitcoin, the community has undergone a sea change in fundamental ways. The UK government intends to impose anti-money laundering regulations, as well as KYC to Bitcoin and other cryptocurrencies.
The digital currency enthusiasts were all praise for the Treasury Report which was made public on the eve of Chancellor of the Exchequer George Osborne’s 2015 Budget. The co-founder & COO of Bitcoin storage service provider Elliptic, Dr. Tom Robinson saw the government’s action as a big positive which will further Bitcoin’s adoption.
“It is positive that the industry is being left to develop its own technical standards (led by the UKDCA) – self-regulation will promote innovation much more effectively than onerous regulation. These measures will help to make the UK a global hub for digital currencies and maintain its position at the forefront of FinTech innovation.”
Hugh Halford-Thompson, co-founder of QuickBitcoin said that the current situation is the ideal opportunity for the government to legitimize the cryptocurrency industry. Having said this, he also expects the financial institutions such as banks, which have been flinching at the slightest mention of digital currencies, to keep their doors open.
Some Bitcoin-related businesses such as the Bitcoin derivatives broker CryptoFacilities have already initiated self-regulatory processes, including AML and KYC. Bitcoin wallet service provider BitGo has partnered with C4 to draft consumer protection measures.
Although the Bitcoin startups in UK are extremely optimistic about the government’s stance, they are hoping for acceptable regulations which lead to mainstream adoption of the cryptocurrencies while not stifling the innovative payments system that they have known to become.
The UK government is set to organize another round of formal consultations in the next Parliament session with the UK Digital Currency Association (UKDCA).