Bitcoin is legal to use in the United Kingdom and in most of the World. Currently the United Kingdom Treasury are looking to produce a new regulatory framework for crypto currencies in the UK. This should be of benefit to Bitcoin in the long term. A fair regulatory scheme should allow for legal clarity and guidance on how businesses that transact with Bitcoin should operate to stay within the rules of the law.
It is important to highlight that a fair regulatory framework will allow Bitcoin to thrive. If there is too much bureaucracy it may stifle Bitcoin and any start ups that wish to start services based on this new currency and protocol. There is not a lot of innovation in the current financial system and much of that can be attributed to the high fees and costs associated with compliance costs, etc.
A good regulatory framework will allow for widespread adoption of virtual currencies. It will lay down standardisation and promote safeguards that will allow for consumers and the wider business community to trust the Bitcoin services they deal with. An effective framework will also allow for clarification where virtual currencies meet with the legacy financial system. A good framework will be sound enough to ensure that companies have disaster recovery plans, good cyber security, customer protections, above-board marketing amongst other things.
Whether the upcoming regulations will be effective vs overly burdensome is yet to be seen but George Osborne has already commissioned the Treasury to produce a programme of work on cryptocurrencies, examining their potential risks and benefits. The results will pave the way toward a new regulatory framework for cryptocurrencies in the UK, showing that virtual currencies are starting to be seen as a genuine enterprise.
(Photo by Rajan Manickavasagam)