London is one of the top financial capitals of the world and London’s unique position gives Britain a stakeholder seat in the global financial markets. Breaking news suggests that Britain might soon be warming up to the idea of having Bitcoin run side by side with the Pound Sterling as a means of exchange and store of value in the country.
It sounds surreal that Britain might start pushing for increased adoption of Bitcoin. For one, Bitcoin has the potential to sidetrack fiat currencies; yet, financial powerhouses in Britain are starting to give thought to the idea that Bitcoin is the future of money.
Barclays’ executive thinks Bitcoin is the future of money
Barclays is already in talks with fintech firms and regulators of financial services on the need to create a framework for bringing Bitcoin to the mainstream market, Barclay’s UK CEO, Ashok Vaswani while speaking at the Money 20/20 fintech conference in Copenhagen, Denmark revealed the plans of the firm.
Mr Vaswani revealed that Barclays is already in talks with UK’s Financial Conduct Authority (FCA) on finding ways to make Bitcoin safe and stable enough for the mainstream. In his words, “obviously (it’s) a new area, obviously an area we’ve got to be careful with. We are working our way through it.”
He also revealed that the Bank is keen on working Fintech companies to find ways to demystify Bitcoin and make it more readily accessible to everyday users who are not necessarily tech-savvy. In his words, “we have been talking to a couple of fintechs and have actually gone with the fintechs to the FCA to talk about how we could bring, the equivalent of bitcoin, not necessarily Bitcoin, but cryptocurrencies into play.”
Britain is home to many of the world’s biggest traditional financial institutions. Albert Pittman, a Saxon Trade market analyst observes that “the country’s economy is seriously interwoven with the fates of these traditional financial firms that calls Britain home”. Hence, it is unlikely that Britain will spearhead any innovation that could threaten the long-term profitability of traditional financial institutions.
Can Bitcoin thrive alongside fiat currencies
Fiat currencies have done a great job of displacing gold as a means of exchange; yet, gold still occupies a significant place in the economy as a safe-haven asset. Fiat currencies have been able to thrive alongside gold because it became increasingly impractical to conduct smaller transactions with gold. Yet, gold price forecasts indicate that the yellow metal will continue to hold a place in the economy.
Interestingly, it appears that Bitcoin and cryptocurrencies might be gearing up to sweep fiat currencies out of the economic scene – or last least, thrive alongside fiat currencies sometime in the future. Apart from Barclays’ obvious interest in Bitcoin, the UK government has started creating some initiatives designed to make the Bitcoin ecosystem more stable. For instance, the U.K Treasury wants more oversight on Bitcoin exchanges to guide against use of Bitcoin to launder money.
Another factor that supports the possibility that Bitcoin is here to stay is the fact that VCs are starting to show increased interest in cryprocurrencies. VC investment for Bitcoin companies surged 51% from the end of 2014 to a total of $676 million at the end of 2015.