The United Kingdom is known to be rather bullish towards cryptocurrencies. The government are one of the few international governments to have established real working blockchain research projects, with a view to fostering a pro-crypto culture in the country. The United Kingdom wants to be known as a cryptocurrency hub, one that allows for a safe and legitimate cryptocurrency and blockchain industry to exist.
On the flipside though, the government and the Bank of England, the UK’s central bank both want to retain control of sovereign currency through the Pound Sterling. This means that whilst the government are open to cryptocurrencies, it seems they still believe in the power of their own FIAT currency. This means they have two options, they either create their own FIAT pegged cryptocurrency, or, they turn down the regulation avenue.
Crypto regulation in the UK is inevitable, thankfully we believe that this regulation will be positive and will allow the likes of Bitcoin to flourish. We want to take this idea and explore some of the reasons why regulation could work here, starting with the big one; currently no laws exist regarding crypto in the UK, and they should. According to Lawyer Monthly:
“The UK has no laws regarding cryptocurrency at present although the exchanges they sit on do have registration requirements. A brief developed by HMRC outlines the tax treatment of cryptocurrency income in terms of capital gains tax, income tax, VAT and corporation tax. It is aimed at those who trade and mine Bitcoin and other cryptocurrencies, as well as the exchanges and payment processors.”
The UK knows that they can tax cryptocurrency and I guess that’s the first step in recognising that regulation should exist. Real regulations here will ensure that current tax laws can be more clear and will mean that investors in the country will be able to better ensure they are paying the correct taxes on their cryptocurrency holdings. What’s more, cryptocurrency regulation will mean that people within the UK will be given access to a clear method for using cryptocurrency, in a safer environment via means they can trust.
UK regulations will help cryptocurrency adoption, not just in the UK but across Europe too, hopefully soon enough we see the government, HMRC and the Bank of England start to take steps in the right direction.